Horizon Europe
 - Question

Viscount Stansgate: To ask His Majesty’s Government what progress has been made since the United Kingdom re-joined Horizon Europe.

Baroness McIntosh of Hudnall: My Lords, on behalf of my noble friend Lord Stansgate, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

Viscount Camrose: Our bespoke Horizon association deal means that UK researchers can now fully participate on the same terms as researchers from other associated countries. The Government want UK academics, researchers and businesses to seize the opportunities presented by participation in Horizon Europe. Yesterday, the Government continued our push to maximise UK participation with the launch of a campaign to encourage UK businesses, academics and researchers to apply to Horizon Europe.

Baroness McIntosh of Hudnall: My Lords, I thank the Minister for a very optimistic prospect, but as he knows, negotiations for the UK to rejoin Horizon were protracted and quite difficult. While there was great relief in the research community when they were eventually successful—he may have heard the Government’s Chief Scientific Adviser Dame Angela McLean talking about this on the “Today” programme this morning—there is ground for the UK to make up. Now that we have rejoined, is the Minister confident that UK-led research bids in this new round will attract their fair share of available funding? Is he aware of any difficulties there might be with visa arrangements for EU researchers who might want or need to come work in the UK? Can he also tell the House whether the Government are formally represented in EU ministerial discussions about Horizon Europe?

Viscount Camrose: I thank the noble Baroness for her questions and will try to cover as much of the material as possible. First, I am pleased to say that we look forward to welcoming Commissioner Ivanova to the UK the week after next, when we will discuss many of these matters. In fact, I will be participating the following week at a ministerial meeting on Horizon in Brussels. It is historically exceptional for associate countries to attend at ministerial level, so I think it demonstrates good will on all sides. Meanwhile, we are  pursuing a wide programme of activities to maximise participation. That includes supporting SMEs and others who would not traditionally have worked with Horizon, as well as a campaign launched yesterday and ministerial engagement. We remain optimistic, but, as I have said in this House, the damage has been done by protracted absence.

Lord Johnson of Marylebone: My Lords, there are seven years of uncertainty to recover from, but better late than never. I strongly welcome the Government’s pump-priming on behalf of applicants to Horizon Europe. In assessing the value for money of the programme, how important do the Government think it is that Switzerland also rejoins, and what efforts are they making to support Bern in that objective?

Viscount Camrose: A range of other countries, as the noble Lord said, are also joining on an associate basis; Horizon is the largest programme of its type anywhere in the world. The total value of the programme is £80 billion over two years, and we consider that rejoining represents a significant opportunity for us following the uncertainty of our period of non-association. As to engagement with Bern, I am afraid that I do not have an answer for the noble Lord, but I will look into it; it sounds like a valuable contribution we could make.

Lord Hannay of Chiswick: My Lords—

Baroness Smith of Newnham: My Lords—

Baroness Williams of Trafford: My Lords, it is the turn of the Liberal Democrat Benches.

Baroness Smith of Newnham: My Lords, I pay tribute to the noble Viscount, Lord Stansgate, in his absence for persistently bringing the issue of Horizon Europe to your Lordships’ House. Today, obviously, we can be very glad that the UK has rejoined, and I declare my interest as a professor of European politics at Cambridge and as having previously received money from European Union research funding. Clearly, as an academic, I am delighted that we are back in, but how much is this blitz of information about rejoining Horizon Europe costing the Government and how far have we lost out by being an associate member and not a full member? As the Minister said, we are now treated like other associate members; what does that mean in practice?

Viscount Camrose: I echo the noble Baroness’s remarks about the noble Viscount, Lord Stansgate. Being an associate member in practice allows us access to all Horizon calls from 2024 onwards, with the very small-in-volume exceptions of EIC funds or what the EU has determined to be strategically sensitive areas, including quantum. I should add that we and the EU have publicly committed to working towards opening even those small areas up, so we would have very full access to the Horizon programme.

Lord Hannay of Chiswick: My Lords, will the Minister accept welcome for the campaign launched by the Government today to catch up with what was  lost? Does he recognise that many of these programmes are multiannual, spanning quite a period, and that it would therefore be a great help if the Government could make it clear that their intention is that we should continue to be an associate member of Horizon beyond the duration of the present programme?

Viscount Camrose: Yes, indeed. I very much recognise the value of the Horizon programme. Of course, any Horizon programme beyond the current one does not exist yet, except conceptually in the minds of all the current participants, but obviously we would look very favourably at participating as and when its terms were made clear.

Lord Winston: My Lords, until Brexit, it was clear that the United Kingdom was second only to the United States in research in science, engineering and medicine. Can the Minister be kind enough to tell the House what assessment the Government have made of the impact of the loss of the Horizon programme in terms of citations and publications?

Viscount Camrose: As I have said in this House before, there is no doubt that our period of non-association with the Horizon programme did lasting damage. We have to focus now on repairing that damage. It is very difficult to put a number in currency on the value of that and I am not sure I would know where to begin. I absolutely acknowledge that the damage was real and is going to take a very conscious effort to fix.

Lord Patel: My Lords, it is good that from 1 January 2024 we are now associate members of Horizon, with the benefits it will bring, including the citation levels, but the Treasury withdrew £1.6 billion of funding that was earmarked for research during the time when we were negotiating joining Horizon Europe, and I understand from a further report published recently that a further £1 billion was removed. Can the Minister confirm that that is not the case?

Viscount Camrose: As is absolutely normal practice, money ring-fenced for a purpose to which it does not go is, in order to keep budgets taut and realistic, returned to the Treasury, but that in no way indicates an intention to diminish our spend on science and R&D. The Government remain committed to spending £20 billion a year on R&D by the 2024-25 spending review.

Baroness Jones of Whitchurch: My Lords, what proportion of Horizon-funded projects are now led by UK research institutions compared to our previous well-known standing in the European research field?

Viscount Camrose: We have only very recently reassociated to Horizon, so we will not know who bid under the Horizon 2024 programme, or who the leader is or who has been successful, for, on average, six to  nine months between making the proposal and receiving word, but at that time I will keep this House up to date on that important question.

Lord Trees: My Lords, today is World Neglected Tropical Diseases Day. Historically, EU Horizon research funding has been hugely valuable in supporting British scientists at our world-class biomedical institutions to collaborate with Asian, African, South American and European scientists to tackle neglected tropical diseases and diseases such as malaria. Can the Minister reassure the House that with our associate membership there will still be the possibility of funding those collaborative arrangements with the global South, with scientists in Africa, Asia and South America, in order to tackle these terrible neglected tropical diseases which threaten the most disadvantaged populations in the world but also our public health?

Viscount Camrose: Yes, absolutely. I thank the noble Lord for bringing up such an important and interesting area of science. I can confirm that our associate membership of Horizon would give us access to any and all Horizon calls alongside any other EU member or associate member, provided they are not designated as strategically significant, which those tropical diseases would not be.

Household Support Fund
 - Question

Baroness Lister of Burtersett: To ask His Majesty’s Government what assessment they have made of the impact of the Household Support Fund; and what plans they have for (1) the future of the fund, and (2) the role of local crisis support generally.

Viscount Younger of Leckie: My Lords, an evaluation of the current household support fund scheme is under way to better understand the impact of the funding. The current household support fund runs until the end of March 2024, and the Government continue to keep all their existing programmes under review. Councils continue to have the flexibility to use funding from the local government finance settlement to provide local welfare assistance. As with all government policies, this remains under review.

Baroness Lister of Burtersett: My Lords, the discretionary household support fund has acted as a vital lifeline come sticking plaster, filling some of the holes in our totally inadequate social security safety net. If, as is feared, the sticking plaster is torn off from April—just two months away—it will leave and deepen a gaping wound of dire hardship. Will the Minister therefore convey to the Chancellor the urgency of the calls from local authorities and civil society groups for the fund to continue for at least a year, followed by a proper long-term strategy for local crisis support in place of last-minute, ad hoc funding decisions?

Viscount Younger of Leckie: I will certainly convey the noble Baroness’s entreaties on that front. I am the first to be aware that the Government recognise that pressures remain on certain household budgets. The household support fund primarily includes help with food and energy bills but also support for other household essentials and bills, such as broadband or phone bills, clothing and essential transport-related costs. On average, households in the poorest income deciles are gaining the most in cash terms as a percentage of net income in 2023-2024 as a result of this Governments’ policies announced in the Autumn Statement of 2022.

Baroness Redfern: My Lords, my noble friend the Minister stated that an evaluation is under way to better understand the impact of the household support fund. Does he agree that the scheme is allocated fairly to local authorities, and, importantly, who decides where funds are targeted?

Viscount Younger of Leckie: I can reassure the House that allocations are targeted fairly and proportionally on the basis of population, weighted by the index of multiple deprivation. The distribution of funding is targeted at the areas of the country with the most vulnerable households. This ensures that funding proportionally reaches those areas in England with the most need. It is for each local council to decide, as my noble friend may know, where and when they distribute their funding, within the parameters of the fund’s terms and conditions.

Lord Palmer of Childs Hill: My Lords, the term “impact assessment” has been used by other speakers. I am sure that the Government have carried out impact assessments of what will happen if this fund is removed or reduced. Can the Minister tell the House how much funding will remain available to local authorities for discretionary local welfare assistance should the household support fund be reduced or discontinued? The idea is that it will come out in the wash, more or less, as the Minister says, but we want to know in advance what the situation will be. For instance, is there an estimate in the Minister’s file of the number of children in England who will no longer be eligible for free school meals during the school holidays once the household support fund is ended or reduced?

Viscount Younger of Leckie: To date, over £2 billion-worth of support has been allocated to local authorities in England via the household support fund to support those most in need. As I said, it is up to local councils to decide how it is disbursed. Local authorities in England are funded through the finance settlement to deliver local welfare provision.

Lord Blunkett: My Lords, it would be deception of the worst order if the Government were to announce, as they have over the last few days, a £600 million uplift to upper-tier local authorities only then, a few days later, to pull the plug on £2 billion. The £10 million that goes to Sheffield has been crucial in maintaining the well-being of thousands of children. I appeal to  the Minister to go back to his colleagues and ensure that there is no duplicity and that the most vulnerable can continue to get help from 1 April.

Viscount Younger of Leckie: I hope I can provide some further reassurance to the House and to the noble Lord. He will know that the Government have announced initial measures for local authorities in England worth £600 million. This includes £500 million for new funding for councils with responsibility for adult and children’s social care, distributed through the social care grant.

Baroness Lawrence of Clarendon: My Lords, what discussion have the Government had with local authorities about sustaining a local crisis support service, given that the majority of the funding is about to vanish in March with the household support fund?

Viscount Younger of Leckie: I alluded earlier to the fact that we were undertaking an evaluation of the household support fund; the HSF4 scheme is under way, which will seek to understand the delivery and impact of the HSF4 funding provided to local authorities. We expected this to be completed in the summer, so I hope that this answers the noble Baroness’s question.

Bishop of London: My Lords, groups such as those with English as an additional language and disabled people face higher barriers to accessing local crisis support. Will the Government in their evaluation consider the strategies that are in place, or could be put in place, to ensure that those who face barriers can access local crisis support?

Viscount Younger of Leckie: Absolutely. That is a very good point, because local authorities have the funding and the autonomy to decide how it is directed. The government guidance is that the most vulnerable must be targeted first. I think the categories the right reverend Prelate has raised would fit into that area.

Baroness Thornton: My Lords, I would like to return to my noble friend’s original Question about the temporary sticking-plaster measures. Decisions made at the last minute are not a substitute for a proper social security system that offers families a safety net in difficult circumstances. I want to ask the Minister about the plan, beyond the decision about the household support fund, which will come very late for families and local authorities. How will the Government ensure proper stability and security for families during difficult circumstances?

Viscount Younger of Leckie: I have outlined some of the measures. Perhaps the noble Baroness is alluding to the benefit cap, which we always keep an eye on. We believe that this provides a very strong work incentive and fairness for hard-working, tax-paying households and encourages people to move into work where possible. I reassure the noble Baroness that we are keeping that under review. The Secretary of State is not minded to review the levels, as there is no  statutory obligation to do so. There was a significant increase, as the noble Baroness will know, following the review in November 2022.

Lord Young of Cookham: My Lords, the house- hold support fund has given a lot of help to vulnerable families, not least unpaid carers. I very much hope it will be possible to continue it. However, if the resources are not there, could my noble friend consider some sort of tapering, rather than a sharp cut-off at the end of March?

Viscount Younger of Leckie: My noble friend is right that we should continue to recognise the important role that unpaid carers play around the country. Our guidance asks that local authorities consider the needs of various households, including unpaid carers. The Government have increased carer’s allowance by around £1,200 a year since 2010-11.

Baroness Scott of Needham Market: Will this evaluation include full consultation and discussions with the charity and voluntary sector, which, after all, understands very well the impact that reducing or removing this fund would have? That sector will be at the front line of picking up the problems should it be removed.

Viscount Younger of Leckie: I will need to check, but I feel certain that that will be the case. I will write to the noble Baroness if I am wrong. It is a very good point.

Baroness Royall of Blaisdon: My Lords, in answer to my noble friend Lord Blunkett, the Minister mentioned the £600 million recently announced for local councils. My noble friend suggested that, even when Sheffield has its allocation of that money, it will still not be enough and will not provide the desperately needed assistance that clearly comes at the moment from the household support fund. How do the Government think that local councils will be able to provide the sort of support that the household support fund gives if it is not there?

Viscount Younger of Leckie: Fairness should be at the heart of this. I reassure the noble Baroness that we are providing support to households, directly and indirectly, to help with the high cost of living, worth around £104 billion over 2022-23 and 2024-25. This includes raising working-age benefits by 6.7% and state pensions by 8.5% from April next year.

Children’s Care Homes: Private Equity
 - Question

Lord Wood of Anfield: To ask His Majesty’s Government what regulation they are planning in response to the findings of a recent investigation by the Observer that private equity firms’ investments in children’s care homes in England have doubled since 2018.

Baroness Barran: My Lords, we recognise the concerns that the noble Lord refers to, particularly around large providers with complex ownership structures. We agree that sometimes placement costs are too high. That is why we are providing £259 million of capital funding to support local authorities to increase care placements and ensure that they meet children’s needs. We will introduce a new market oversight regime that will increase transparency on debt structures and profitability.

Lord Wood of Anfield: My Lords, I thank the Minister for that Answer. The problem, however, is that the current mixed economy in the children’s care market is completely broken. Private equity providers are making high profits in the sector, increasing their margins and carrying large levels of debt, yet expanding their share of the care market at the same time. Meanwhile, increasing numbers of councils face crisis or even bankruptcy. Can the Minister tell us how the Government plan to eliminate specifically private equity profiteering in this sector? Can she also clarify whether it is government policy to substantially reduce the presence of private equity firms in the children’s care market?

Baroness Barran: I am glad that the noble Lord used the word “profiteering”: he beat me to it. As he has heard me say before, the Government are not against profit-making but they are against profiteering. Having much greater financial transparency will go some way to addressing his concerns, but the fundamental thing that has to shift is having fewer children in children’s homes and more children in foster care. That is why the Government place such emphasis on supporting foster carers and, indeed, kinship carers.

Baroness Tyler of Enfield: My Lords, a recent DfE review found that a third of the just-over 6,500 youngsters in residential care homes could have gone to foster homes, which usually offer better outcomes and a better quality of life, and cost about a 10th of the price. The Minister has just referred to this. What precisely is going to happen to ensure that there is proper and meaningful investment in foster and kinship carers to reduce the councils’ dependence on some of these private equity residential care providers and stop this extreme and excessive profiteering?

Baroness Barran: The noble Baroness will be aware that we are investing £36 million in foster care, starting with work with local authorities in the north-east to encourage recruitment of more foster carers. That programme has got off to a very good start. We have also launched the first ever national kinship care strategy, backed by £20 million of investment in the financial year 2024-25.

Lord Sikka: My Lords, private equity has already devoured care homes such as Southern Cross and Four Seasons, which actually had more subsidiaries than General Motors. Profiteering, asset stripping and tax avoidance are the basic business model in private equity. Studies have shown that private equity in care  homes is making profits in the range of between 30% and 40% of the revenues. That is clearly unacceptable and is very poor value for public money. Can the Minister give an undertaking that there will be an investigation into the role of private equity in care homes and healthcare?

Baroness Barran: The noble Lord will be aware that the Competition and Markets Authority has already done a great deal of work in this area and has made recommendations which are behind our commitment to a much clearer market oversight regime. We will bring forward legislative changes to enact that when parliamentary time allows.

Baroness Bennett of Manor Castle: My Lords, I will follow on from the question of the noble Lord, Lord Sikka, about value for money. The Minister said that the Government are against profiteering but not against profit. What actual value is added by having private sector companies involved in this sector, when we should see all the public money that is being spent going into the care of children, and not into profits?

Baroness Barran: The first thing—whether the noble Baroness agrees or not—is that it provides an enormous amount of capacity, and in her zeal to address the profitability of the sector we need to consider also the stability of those placements for children.

Lord Whitty: My Lords, I think it was only two Prime Ministers ago who promised before the last general election that they would fix social care. The problems that we have talked about today apply to the whole of the social care sector. In effect, those who pay for care—whether for elderly parents or local authorities for children and others, who are very vulnerable people—are subsidising private equity companies’ profits. When are the Government going to get round to fixing it and have a whole new policy for social care that improves the conditions for everybody?

Baroness Barran: We have announced our new social care strategy. The noble Lord will be aware of the independent review of children’s social care, which we have acted on. We are now starting to implement the initial pathfinder sites to test our new family-led approach to social care. As he said, these are vulnerable children and families, so we need to do this judiciously.

Baroness Wilcox of Newport: The Minister previously spoke of bringing in financial oversight to children’s social care. Figures from PoliticsHome show that the average placement now costs £281,000, which has risen by 25% over the last two years. Clearly, swift steps need to be taken to bring down those costs. She has previously alluded to the money going in, but can she be clear about the timeline for a new financial oversight regime and how it will help?

Baroness Barran: As I said, bringing forward the legislative changes necessary to implement a new regime depends on parliamentary time. However, we  are not wasting any time in trying to support the foster market, for all the reasons that noble Lords have already set out.

Baroness O'Grady of Upper Holloway: My Lords, there is a sense of urgency here, as this issue is not only about gross profiteering and loading up homes with debt but about respect for the human rights of children. What active consideration are the Government giving to price caps, which some local authorities have called for—or, better still, to moving towards a model of public ownership in the public interest?

Baroness Barran: We are looking at a number of different options in this area. Although I am not suggesting that these are absolutely comparable, in 2023-24 the average cost of a residential care placement provided by a local authority is just under £5,500, but the average placement provided by the private or voluntary sectors is just under £4,700. Costs may not be the main issue here.

Lord Alton of Liverpool: My Lords, to give the House a clearer idea of the trends, can the Minister tell us how many children are currently in care homes and foster homes? What have been the trends over the last decade and what are the predictions for the next decade?

Baroness Barran: There are just under 8,000 children in children’s homes, about 57,000 children in foster care and just under 7,000 children in either secure placements or independent supported accommodation.

Lord Forsyth of Drumlean: My Lords, this attack on the private sector is extraordinary, is it not? Local authorities are desperate for capital and the resources to provide for children, yet the private sector, which is providing that capital, is under attack. Surely the alternative is that there will not be the resources needed for children.

Baroness Barran: My noble friend pointed to a more fundamental question, namely: why have local authorities and charities, which used to provide these services, stepped back in a world where the private sector can make a decent return on them?

Lord Watts: My Lords, let me be clear: it seems from the Minister’s answers that the Government are quite happy for these companies to rip off the taxpayer. When will they do something about the taxpayer being ripped off by companies that are adding to debt and making huge profits?

Baroness Barran: I am not aware of the specific cases the noble Lord referred to, and it is dangerous to generalise in this area. We have seen disgraceful behaviour by some providers—noble Lords will remember the case of the Hesley homes where unforgivable child abuse went on—but that is not what we are seeing across the whole sector. What we need is  to move those children who do not need to be in children’s homes out of them and into foster care or kinship care—and that is where we are focusing.

UK-Canada Trade Deal: Suspension of Negotiations
 - Question

Lord Foulkes of Cumnock: To ask His Majesty’s Government what assessment they have made of the effect of the suspension of negotiations for a trade deal with Canada.

Lord Offord of Garvel: I thank the noble Lord for his Question. The pause in negotiations does not impact our existing trade agreement with Canada, which underpins £26 billion- worth of trade per annum. The UK has decided to pause negotiations towards a new UK-Canada FTA in response to actions taken by Canada that reduce our current market access. Negotiations were launched with public commitments to increase and improve trade. Recent additions by Canada do the opposite. It is right, therefore, to pause the negotiations.

Lord Foulkes of Cumnock: My Lords, post-Brexit trade negotiations are in total chaos. George Eustice, who was Environment Secretary in the Cabinet at the time, described the deal with Australia as a “failure”. Now we have pulled out unilaterally from the Canadian deal. Is that because the Secretary of State is too busy plotting, or perhaps because we do not have enough qualified people to negotiate with Canada? On what basis and terms do we crawl back in to ask Canada to restart negotiations?

Lord Offord of Garvel: I fundamentally disagree that we are in chaos; quite the opposite. We are making great progress. The first thing that we did when we left the EU was do a trade deal with Europe that involved rolling over trade deals with 65 countries. We have now improved that with a further seven deals. When I was in Canberra two months before Christmas, the Australia deal was held up as one of the best deals it had ever signed. As we move through, because our economy is 80% services and 20% goods, we have now got trade deals that encompass services, digital and innovation.
We wanted to do the same deal with Canada, but Canada crossed one of our red lines. The negotiations have not failed. The noble Lord and I have done many negotiations together—we sometimes have moments of pause. The Canadians have crossed a red line where they know we would never accept the hormone beef trade deal that they want to do with us. We have said no to that, which is why we have stopped.

Baroness McIntosh of Pickering: My Lords, I congratulate the Government on the position they have taken by pausing the trade talks at this time,  reflecting the high production standards that our farmers have to meet in this country. Could my noble friend explain what the position is specifically on exports of British cheese to Canada, including the excellent cheese produced in north Yorkshire? I understand it now suffers from a 245% tariff on export to Canada.

Lord Offord of Garvel: Cheese is now a pawn in the game, and that has now become the focus of attention. When we were in the EU, we had 2,000 out of 14,000 tonnes of cheese allocated to us. That has now been taken away and allocated to Europe—France and Germany, mostly. We are now allocated 6,000 for the rest of the world. Canada knew that we had a right to roll that over to 2,000 within the WTO trade agreement. We do not have that now. That is £18 million of trade. Out of £26 billion, one might say that is a small number, but we know that the farms in Somerset and Wales in particular, which produce incredible quality cheese, have built up a superior market share in Canada. The Canadian consumer wants this cheese and has been buying and stockpiling it for six months in advance of this happening. This has only happened because the Canadian farmers want to send hormone beef to the UK and we refuse to drop our standards, as some people said we would do when we left the EU.

Lord Purvis of Tweed: My Lords, among the letters I received from Ministers after every trade negotiating round with Canada, saying everything was on track, the letter telling me that things had gone off the rails—sorry, “paused”—must have gone astray. That information that the Minister gave is not new information. I warned the noble Lord, Lord Johnson, last summer, after I led a CPA delegation on trade to Ottawa and Toronto, of the difficulties—but he ignored them. That is compounded by the fact that businesses are now paying £100,000 more per business for trade with Europe and new checks will be coming into place tomorrow. So when does the Minister forecast that we will have frictionless trade with Europe?

Lord Offord of Garvel: With Europe, as the noble Lord knows, when we agreed to join what was then the European Common Market, Europe accounted for one-third of global trade. We all know that, when we left in 2019, that was 16% of global trade. In 2050, the OECD says it will be 9% of global trade. So the UK has tilted to where the market is. The market is in the Indo-Pacific, which is why we joined the CPTPP. The last time I looked at the map, Britain was not anywhere near the Pacific. We managed to get America’s place in the CPTPP, which is 40% of the world’s fastest-growing consumers. As we sign those trade deals and go around with Vietnam, Indonesia, Korea and Japan, we are building out a trade base for our farmers and manufacturers which is far greater than they had in Europe.

Lord Wigley: My Lords, I recognise the importance of the safeguards on beef, which I am sure are of concern to everyone. However, does the Minister not accept the point made by the noble Baroness a moment ago about the impact on cheese manufacturers?  It is not only the extent of the charges that will hit them but the speed with which they may come in, and there could be very serious cash flow implications for many manufacturers. Can the Government please look at some possible relief for such companies, which may be suffering as a direct consequence of these changes?

Lord Offord of Garvel: I thank the noble Lord for that question. We fundamentally agree with that. We have been talking with the cheese manufacturers all the way through this. We send £200 million-worth of food to Canada and it sends us the thick end of £600 million back, mostly wheat, maize and lobster. However, we do not want to take the hormone beef. That is where the beef is. The issue, therefore, is that we have £18 million of trade that we need to try to support, and we will do our best to support those impeccable farmers, especially in the West Country and in Wales.

Lord Hannan of Kingsclere: My Lords, Canada is notorious for gearing its trade policy around its dairy sector, which is particularly strong in Quebec. However, is not the wider issue here whether Britain will always follow EU rules on sanitary and phytosanitary standards? According to the WTO, SPS measures must never be economic and can be justified only by science. The EU’s ban on these various kinds of beef has been condemned by its own scientific advisory agency and by the WTO. Is it the view of my noble friend the Minister that our SPS regime, as long as it is tied to the Brussels one, it is compatible with WTO regulations?

Lord Offord of Garvel: This is the issue. Canada has been in a recent—2016—deal with the EU and understood the SPS rules of the EU. It understands fundamentally that we are not reducing our rules on SPS, but it has seen an opportunity, and you go for the gap when you see the opportunity, do you not? If you are a trade negotiator, you think to yourself, “Where can I get my point of advantage?” On our two outstanding issues, the cheese and the rules of origin—where, again, we are pretty much sorted with a rollover from the EU—Canada has seen an opportunity to cross that line. It is a pause in negotiations and we will get back round the table as soon as it comes back over the red line.

Lord Leong: My Lords, the Institute for Government has warned that the Government’s failure to set out red lines on key issues in trade talks is a “recipe for disaster” and could delay new trade agreements. They now need to move urgently to put them in place, otherwise they will find themselves losing control of trade negotiations to better-prepared partners. What assessments have the Government made of the size and experience of negotiating teams as part of the recent machinery of government changes?

Lord Offord of Garvel: I thank the noble Lord for that. That is one of the reasons why we split up BEIS and put it into different, independent departments. However, my department, the Department for Business and Trade, is now well equipped to lead these negotiations. As I say, we have done the 65 country  rollovers; we are now up to 73 countries and we have another 12 in the pipeline. We have a chief negotiator, Crawford Faulkner, who came in from New Zealand— I declare an interest in that he was born in Greenock, around the corner from me—who is doing an excellent job. The issue here is that our economy is now 80% services and 20% goods, but our exports are 50:50, which is because our goods are good. They go around the world and everyone wants to buy them. However, the direction of travel will be two-thirds services, one- third goods, which is why we need new trade agreements that cover services—not just goods—digital and innovation. That is exactly what we have with Australia, and that is what we are trying to achieve with Canada. I am hopeful that we will be able to get the show back on the road with Canada.

Baroness Quin: My Lords, following the comments made by the noble Lord, Lord Purvis, will the Minister at least assure us that trade with our nearest and biggest market is still important to us? Will he perhaps also reflect on some of the problems of trading with countries very far away, both in terms of environmental impact and of course recently in terms of the very worrying security situation in the Red Sea?

Lord Offord of Garvel: I thank the noble Baroness for that. Indeed, the EU 27 still account for 40% or 41% of our exports. If you expand that to the euro 34, it is 49% of our exports. So 50% of our trade is still with Europe, 20% is with America and 30% is with the rest of the world. But the direction of travel is that the growth will come from the rest of the world, not just in Europe. Europe will remain important. In terms of our goods, the sticky part of our pie chart has been our manufactured goods to Europe, which is 24%. That has been difficult—but the other 76% is going gangbusters.

Modern Slavery Act 2015 Committee
 - Membership Motion

The Senior Deputy Speaker: Moved by The Senior Deputy Speaker
That Baroness O’Grady of Upper Holloway be appointed a member of the Select Committee, in place of Baroness Henig; and that Baroness O’Grady of Upper Holloway be appointed Chair of the Select Committee.
Motion agreed.

Investigatory Powers (Amendment) Bill [HL]
 - Third Reading

Scottish Legislative Consent sought

Motion

Lord Sharpe of Epsom: Moved by Lord Sharpe of Epsom
That the Bill be now read a third time

Lord Sharpe of Epsom: My Lords, throughout the preparation and passage of the Bill, we have been working closely with each of the devolved Administrations. Most of the provisions are UK-wide and are reserved, as national security is a reserved matter. A small number of measures in Part 2 of the Bill, on oversight, engage the legislative consent process in the Scottish Parliament. Currently, the Scottish Parliament has not granted a legislative consent Motion, although I can confirm to noble Lords that the Scottish Government have lodged one. We are engaging constructively with officials, and I reassure noble Lords that the Government will continue with this engagement as the Bill is introduced into the House of Commons. I beg to move that this Bill be read a third time.

Motion

Lord Sharpe of Epsom: Moved by Lord Sharpe of Epsom
That the Bill do now pass.

Lord Sharpe of Epsom: My Lords, I extend my gratitude to all noble Lords who have contributed to the Bill, both on the Floor of the House and outside. We all agree that this piece of legislation is both important and necessary. The targeted amendments that it will make to the Investigatory Powers Act 2016 will ensure that the UK’s intelligence services and law enforcement will continue to have the tools at their disposal to keep this country safe, while ensuring that these are used in a proportionate way which places privacy at its heart. As the Bill passed through this House, the valuable debate has shaped it into what it is now. I am pleased that the House was able to reach agreement on several areas of potential divergence and that we send the Bill to the other place in exceptional shape and with cross-party support.
I first correct the record on one small point I made in my speech on the second group of amendments in last Tuesday’s debate on Report. His Majesty’s Treasury is not an example of a public authority that already has the power to acquire communications data using a Part 3 request. Examples of public authorities which do have these powers include His Majesty’s Revenue & Customs and the Financial Conduct Authority, both of which perform a range of vital statutory functions using communications data.
Once more, I extend thanks particularly to the noble Lord, Lord Anderson of Ipswich, who has been crucial in shaping the Bill through his independent review of the Investigatory Powers Act and his contributions during the Bill’s passage. My thanks go also to the noble Lord, Lord West of Spithead, and his colleagues on the Intelligence and Security Committee. The input from him and his fellow committee members has been valuable and intended to improve the Bill. He has been ably and knowledgeably supported by the erstwhile chair of the committee, the noble Lord, Lord Murphy of Torfaen.
Similarly, I have valued the collaborative and serious way in which the Opposition Front Benches have engaged on matters of such importance, so I offer my  thanks to the noble Lords, Lord Coaker, Lord Ponsonby and Lord Fox, for their desire to scrutinise the Bill carefully and constructively.
I am much obliged to the support of other noble Lords who have contributed with such eloquence and expertise as the Bill has passed through this House. In particular, the noble Baroness, Lady Manningham-Buller, and the noble Lords, Lord Evans of Weardale and Lord Hogan-Howe, have all provided an invaluable perspective from their professional backgrounds. The noble Lord, Lord Carlile of Berriew, and the noble and learned Lord, Lord Hope of Craighead, both made a number of important and insightful interventions to help shape the debates and work towards practical solutions, for which I am grateful. My thanks go also to my noble friend Lord Gascoigne and his team in the Whips’ Office for their support as the Bill passed through this House.
I ask noble Lords to join me as I thank the policy officials and lawyers in the Home Office teams led by Lucy, Phoebe, Lucy, Hugh, Rob, Daphne and Becca, whose significant efforts have made this Bill happen. It is their hard work that has brought the Bill to this point. My thanks go also to the Bill team—Tom, Megan, Sophie, Emer and James—as well as Dan in my private office. I am also very grateful to Pete and Lucy, the expert drafters in the Office of the Parliamentary Counsel, for preparing the Bill and amendments during its passage.
Finally, I thank the intelligence agencies and law enforcement for their expert contribution to the Bill and for the work they do to keep this country safe day after day. The Bill will ensure that they continue to have the tools they need to carry out this task. We will all be the safer for it. We remain hugely grateful for their work.
As we send the Bill to the other place, it needs very little amending, save for some tidying up here and there. It is the first job of government to keep this country safe. The Bill helps us do just that.

Lord West of Spithead: My Lords, first, I thank the Minister and his team for the liaison and the work we did together to try to meet all our concerns about the Bill. I also thank him for giving me the excitement of my life in that I had an amendment accepted—for the first time in 14 years. That is a pretty good strike rate, is it not? I was pleased about that as well.
We on the ISC are very happy that the Bill is needed. However, as the Minister knows, we are still concerned that there is insufficient acceptance of the fact that parliamentary scrutiny is required by the ISC more broadly in this and a number of other areas. I am sure this will be brought up in the other place; otherwise, I am pleased that we have moved this Bill forward at pace.

Lord Anderson of Ipswich: My Lords, I echo all the thanks that came from the Minister. I do not think I can add to his list, but I certainly endorse everything he said.
Bills of this nature can be controversial. We are seeing this in some other parts of the world at the moment. That was not the case in your Lordships’ House. That  is testimony to the care with which the Bill was prepared, the civilised way in which it was debated and the openness of the Government to some of the important points made during our debates. I single out in particular the work of the Intelligence and Security Committee for the great scrutiny that it applied to it.
If I may, I will depart briefly from the studied impartiality associated with the Cross Benches. With the Government and Opposition so closely aligned on a Bill, it was particularly useful that we heard from the Liberal Democrats—with their sometimes annoying but rather necessary process of probing amendments. They caused everyone to think carefully about what we were doing. All in all, it was a happy experience for me. I hope that this is a good model for future Home Office Bills.

Lord Fox: My Lords, having been cleared to annoy your Lordships’ House, I will do my best to do so.
This Bill started in your Lordships’ House and now heads to the Commons. Its primary purpose of enabling the intelligence services to better build their data models and teach their AI systems has been left completely unmolested by your Lordships. However, other parts of the Bill have attracted a fanfare of concern from certain external parties—particularly the large platforms. Whether the Government and Apple are at cross purposes or the Minister really is out to get it, we in your Lordships’ House were unable to muster sufficient traction to find out or clarify. It is now up to the MPs if they choose to pick up that particular baton.
There was also an unresolved issue around the triple lock and the Prime Minister’s role when they might be in conflict. Again, this has moved from our orbit. I hope the tenacity of the noble Lord, Lord Anderson, and the noble and learned Lord, Lord Hope, might still be involved somehow between here and the other place. The Minister raised the important issue of legislative consent. I hope he is successful in these negotiations.
I echo what other noble Lords have said. This has been a well-mannered and constructive process of discussion, with everybody moving in the same direction, albeit at different speeds.
I thank the Minister and the team he named for their time, availability and openness in our discussions. I also thank all the many external organisations and individuals who took time either to meet and brief or to send information which helped inform our debate. The discussion was greatly enhanced by the noble Lords, Lord Coaker and Lord Ponsonby, from the Front Bench, and by colleagues on their Benches, as well as the Cross Benchers. They played a pivotal role in our discussions.
Finally, I thank the home team: my colleague, my noble friend Lord Strasburger, and, most of all, Elizabeth Plummer in the Lib Dem Whips’ Office, without whom nothing is possible.

Lord Coaker: My Lords, we welcome the Bill and see it as an important step forward for our country. I thank the Minister and his colleagues very much for their constructive engagement all the way through; we  very much appreciate that. I join the Minister in thanking his officials, all of whom have been helpful in ensuring that we understand the Government’s proposals. I wish him well with the Scottish Government and sorting out the various legislative consents; I hope that happens as soon as possible.
I thank my noble friend Lord Ponsonby for his support and help, and Clare Scally of our Whips Office, who has done an amazing job. I also thank the noble Lord, Lord Fox, the representative of the Liberal Democrats, who have engaged with us and others constructively on the Bill. I also single out the noble Lord, Lord Anderson of Ipswich, whose report gave us a hugely beneficial platform through which to move forward. When an expert puts a report together and the Government engage constructively with it, it helps enormously. Similarly, I thank my noble friends Lord West and Lord Murphy, the ISC for its work and the intelligence services, some of whose representatives are here, for their input. It would be remiss of us not to join the Minister in thanking them again, particularly when we read on the front pages of our newspapers the threat to so-called Iranian dissidents in this country from Iranian criminal gangs. It shows yet again the importance of the work they do.
The Bill is an important step forward because it maintains the powers that our police and other services need to stay ahead of the criminals and those who would organise against us. There are still one or two issues to be looked at, but the Bill leaves us in a good place. As the noble Lord, Lord Fox, said, there will be continuing debate about the triple lock and whether the wording used is completely right, but it is a significant step forward. As my noble friend Lord West mentioned, it shows the Government in a good light when they listen to the arguments and accept amendments because they are the right thing to do. I hope that we can do that in other areas as well.
There are still issues with the oversight the ISC has more generally of government business, and how large companies’ security measures and the work they do will continue under the Bill. However, the Minister is to be congratulated on the open way he has led the legislation through the House. As others have said, it is a case study in how to do it, and we are very grateful for it.
Bill passed.

Post Office Ltd
 - Commons Urgent Question

The following Answer to an Urgent Question was given in the House of Commons on Monday 29 January.
“Following a conversation with the Secretary of State for Business and Trade over the weekend, Henry Staunton agreed to step down as chairman of the Post Office. An interim chair will be appointed shortly, and a recruitment process for a new chair will be launched in due course, in accordance with the governance code for public appointments. I will update the House when we have further details.
The current chairmanship was not proving effective, and we had a difficult decision: change course, or wait and hope that it improves. Given the challenging context for the Post Office and the importance of the role of chair, the Business Secretary took decisive action. I understand that Members would like more details around the decision, especially considering that the Post Office is rightly under heightened scrutiny at this time. I can confirm that there were issues beyond the handling of the Horizon scandal, but as honourable Members would expect, I am not able to comment on the specifics of individual human resources cases.
As the Business Secretary has said, Post Office governance is a priority for the Government. The Post Office is a public corporation; as such, the Post Office board has responsibility for the strategic direction of the company. While there was a clear need for new leadership of the board, we continue to have confidence in the other board members, who are experienced executives with a range of business expertise across the legal, financial, insurance, asset management and pensions sectors; there are two elected postmaster non- executive directors, too.
The Post Office faces unprecedented challenges. It needs to work at pace to deliver compensation to the thousands of postmasters who fell victim to a faulty IT system, as well as to continue the essential work to implement the necessary operational and cultural changes needed in the business. As such, strong and effective leadership of Post Office Ltd is a necessity”.

Lord McNicol of West Kilbride: My Lords, I will follow up on the questions asked in the other place yesterday. When responding to a Post Office Question last week, the Minister said that this whole debacle and scandal had shown the Post Office in a good light—not Post Office Ltd but the postmasters and postmistresses. We agree with that. What changes was the Secretary of State looking to achieve in the removal of the chair, and what is the timeline for rebuilding trust in Post Office Ltd?

Lord Offord of Garvel: I thank the noble Lord for that question. To clarify, the question was whether the Post Office brand was damaged. Many people would say that it was a toxic brand. My argument was simply that if one believes that the real Post Office is actually the postmasters, they are the heroes of the day. If anything, their brand has been enhanced but there is no doubt that the management and oversight of the Post Office has been seriously compromised over many years.
Perhaps we should remind ourselves how this company operates, which is on an arm’s-length basis. It is owned by the Government—the taxpayer—and there is one shareholder: HMG. Yet, like many of our public bodies, it is now managed on an almost separate, arm’s-length basis. In doing so, a board is created that looks like a public company, but when is a public company not a public company? It is when there is a board that does not do the job it is meant to be doing.
There was an executive management team, and the role of non-executive directors is to challenge that team. The role of the chairman is, principally, to represent the shareholders and to call the executive management to account. Clearly, that has not happened here. Since 2015, a whole new set of executive managers has been put in place, as well as a new board. In 2023, there were three new independent directors. We have the chair, and through the increased scrutiny resulting from the Government perhaps being more interventionist, some disagreements within the board have come to light. The Secretary of State believes that the current arrangements are not working, so it was agreed by mutual consent to part company. We have taken decisive action to change course and improve, rather than to wait and hope that the situation improves.

Lord Fox: The Minister’s answer is really helpful, because the question is, when is arm’s-length not arm’s-length? It is clear that it has ceased to be an arm’s-length operation, rightly or wrongly. His Majesty’s Opposition asked for a timetable, and it would be helpful if the Minister gave it to us. How much leeway will the new chair have to do what he or she needs to do, in their mind, to achieve the objectives, and how much will that arm’s-length relationship be pulling the chair back?

Lord Offord of Garvel: To clarify, the Post Office is constitutionally set up to be arm’s-length and will remain so. We are now talking to the Secretary of State about tightening the governance of that. The key position is the chair, who runs the board and is accountable to the shareholders. We will appoint an interim chair as soon as possible, with a view to getting a new person in post this year. That will coincide, I hope, with the inquiry coming through at the end of the year.

Lord Sikka: On 22 January, I tabled a Written Question about possible conflicts of interest associated with the position of Henry Staunton, the former chairman of WH Smith, which operates Post Office franchises. I have yet to receive and Answer. Mr Staunton has now gone—nothing to do with me, I am sure. First, can the Minister publish the conflict-of-interest assessment made when Mr Staunton was first appointed as chair of the Post Office? Secondly, can the Minister explain how it is that Simon Jeffreys is a director of the Post Office and the Crown Prosecution Service? How did that happen?

Lord Offord of Garvel: I thank the noble Lord for those questions. The removal—the resignation by mutual consent—of the chairman, Mr Staunton, is clearly an ongoing HR issue and we have been clear that we are not going to comment on that in public. That will now take place and no compensation will be paid, but that is still in process in terms of taking action. As far as the rest of the board is concerned, we are happy with the three new non-executive directors who came in in 2023. We have two sub-postmaster representatives, and we are looking for a senior independent director, which will further strengthen the board.

Baroness Brinton: In the Commons on 10 January, the Prime Minister promised that postmasters would be cleared and compensated swiftly. That same day, Minister Kevin Hollinrake said at the Dispatch Box that all compensation should be paid by August, which is encouraging after many years of delay. However, last Sunday, the Secretary of State Kemi Badenoch said on the BBC that setting a deadline is “not a priority” and that getting the money out and sorting out the governance of the Post Office is the critical thing. Which is it—that the compensation should be paid by August, or that a deadline is not a priority?

Lord Offord of Garvel: I thank the noble Baroness for her question. We have to clarify that what we are doing here is separating their compensation, so that it is done as immediately and expeditiously as possible. Then we will do fact-finding through the inquiry and accountability will follow. The Prime Minister and Secretary of State have said that there will be no deadline put in place, partly because this is a complex process that requires the postmasters to co-operate and come forward. Of the 2,417 postmasters in the HSS scheme, 100% have received offers, of which 80% have been accepted. We are making great progress.

Lord Browne of Ladyton: My Lords, on the issue of how long the arm between the Government and the Post Office was, in 2020, following a High Court decision against the Post Office, experts on electronic evidence were invited by the Government to suggest changes to the legal presumption that computers are reliable. That lies at the heart of this case. To whom did those experts report, was the Post Office consulted about whether the recommendations should come into force and why have the recommendations never even surfaced, let alone been put into force?

Lord Offord of Garvel: I thank the noble Lord for his question. I know that he is well versed in these matters. As we have discussed in the House before, there will be many ramifications from this case when the facts come out, one of which, as the noble Lord highlighted, is this presumption that the computer is always right, which clearly was not the case. I would have to refer to MoJ colleagues to find out exactly what happened in that case. The judgment was given in the Appeal Court in 2019 and the inquiry was set up in 2020. In 2021, when the convictions were overturned, the inquiry became a statutory inquiry. Under a statutory inquiry, we will get to the bottom of those questions.

Lord Watts: My Lords, the chairman oversaw this scandal. Can the Minister assure us that he will not be given a compensation package that demonstrates that, if you fail, you get paid?

Lord Offord of Garvel: The chairman who is just leaving was not the chairman pre-2015 and he is not receiving any compensation.

Lord Foulkes of Cumnock: My Lords, I am perplexed: the Statement said that the chairman left by mutual agreement, the Minister spoke earlier  about his resignation, but the Secretary of State made it clear that she sacked him. Which was it? Henry Staunton was appointed by a Conservative Secretary of State, so presumably that was a mistake, for which the Minister is apologising. How can the Government make sure that, when they appoint a new chairman, they will not make the same mistake again?

Lord Offord of Garvel: I thank the noble Lord for that. A key part of making these appointments is to make sure that we have the right people, in the right place, and the right leadership. In this case, we agreed to part company by mutual consent. The point is that there are issues with the governance of the Post Office beyond Horizon. There needs to be further reform of the Post Office and we have to start with the chairman to move that forward.

Lord Fox: My Lords, the Minister said that it was hoped that the appointment would be made as soon as possible, hopefully this year. In the meantime, this organisation is a burning platform; it needs leadership. Where does the Minister expect that leadership to come from until the appointment is made?

Lord Offord of Garvel: The assessment at the moment is that, with the strengthening of the non-executive directors and the current executive team in place, we have a team that can continue to manage the Post Office. We believe that we have a situation that is stable, but it now needs to be improved. That is the challenge before us.

Teesworks Joint Venture
 - Statement

The following Statement was made in the House of Commons on Monday 29 January.
“With permission, I would like to update the House on the independent review into the South Tees Development Corporation and the Teesworks joint venture, which the Government are publishing today, having received the final report last week.
Before turning to the specifics of the report, it is important that I remind the House of the significance and sheer scale of this project. Teesworks, in north-east England, is the United Kingdom’s largest industrial zone. Remediating and regenerating the former Redcar steelworks is a highly complex brownfield regeneration opportunity, the alternative to which is a massive liability to taxpayers in clean-up costs and an annual multimillion pound bill just to maintain a highly contaminated site. Most importantly, as Michael Heseltine said in his 2016 landmark report on the Tees Valley, the site is also part of ‘a much bigger picture’, and one that provides an opportunity for regeneration that is unrivalled not only in size and scale, but in potential opportunity, as we are seeing with the development of the freeport. That is why it is too important to the communities of the north-east for Teesworks to be used as a political football.
Over the course of the last year, using parliamentary privilege, the honourable Member for Middlesbrough, Andy McDonald, who is not in his place, has made a  series of allegations about Teesworks. This culminated in April and May 2023, when the honourable Member spoke, and I quote for the record, of the existence of ‘industrial-level corruption’ and ‘dubious dealings’.
These accusations are about the most serious that can be made. If true, they would almost certainly be criminal, and their mere existence threatens confidence in this immensely important, complicated and challenging project. At the request of the Tees Valley Mayor, an extraordinary independent review was launched by my right honourable friend the Secretary of State for Levelling Up, Housing and Communities, to consider the allegations as well as the combined authority’s oversight role. Today we have the answers to the primary question about the extremely serious charges of corruption and illegality—they are not correct; they are untrue. For the avoidance of doubt, let me repeat that: no corruption, no illegality. There is no evidence to back up the worst of the allegations repeatedly thrown at the local parties managing the project, no referrals onwards to other bodies for further review, and no substance to the most serious of allegations.
In addition, and at the Secretary of State’s request, the panel has also made a series of constructive recommendations, including strengthening governance and increasing transparency. We welcome that oversight, as does the Mayor of the Tees Valley, who has confirmed that he intends, in principle, to accept all the recommendations relevant to him and his authority. For the two recommendations relevant to central Government, the department will carefully consider how to support the continued success of mayoral development corporations across the country.
I know that colleagues in the Department for Environment, Food and Rural Affairs and His Majesty’s Treasury will also consider the recommendation regarding landfill tax. My right honourable friend the Secretary of State has today written to the Tees Valley Mayor, asking that he responds to the panel’s recommendations, with an initial response within six weeks. My right honourable friend will of course wait to review those proposals before deciding on further action, but the central point bears repeating: nothing was found by the reviewers to support the very serious allegations made.
This report has been a detailed and thorough piece of work, and I place on the record my great thanks to the three-strong panel for their thorough and well informed work over recent months. I thank Angie Ridgwell, chief executive of Lancashire County Council; Richard Paver, previously first treasurer of the Greater Manchester Combined Authority; and Quentin Baker, director of law and governance at Hertfordshire County Council. Copies of the review, and my right honourable friend the Secretary of State’s subsequent correspondence with the mayor and the panel, will be placed in the Library of the House.
Finally, I wish to remind right honourable and honourable Members about the rich heritage of Tees Valley. It has a proud industrial history and this Government are committed to giving it the proudest possible future, putting it front and centre of our mission to level up the country, and supporting all our regions to prosper and flourish by making sure that  local people have projects they can champion. The independent review has cleared the Tees Valley mayor and the combined authority of lurid allegations of corruption and illegality, and it has recommended improvements that I am confident will be driven by local stakeholders. We are delighted to support a project that is bringing huge benefits to the people of Teesside and the rest of the UK, and for all those reasons I commend this statement to the House”.

Baroness Taylor of Stevenage: My Lords, at the heart of this issue are the people of Teesside and the public asset formerly owned by them, which should be regenerated for their benefit, to generate jobs, employment and industry. They should also be receiving sufficient return for their investment of land and the other value of the site. The governance of the project should ensure an appropriate sharing of the risk taken by the private sector partners in order to justify the returns they have already accrued, as documented in the review. For the Government to suggest in this Statement that the report exonerates all those involved from any questions about what has happened and to insinuate that local MPs’ challenge of the many issues explored in the review was them using the communities of the north-east as a political football is simply not appropriate.
We understand that the project is complex. I have experience of instigating and overseeing a billion-pound regeneration project, so I understand the complexities that can arise. We also recognise that, in an area like Teesside, the urgency of moving at pace on a project which is going to generate jobs and employment is vital. However, that should not give any of those involved carte blanche to ignore the absolute necessity for the project to follow the strongest principles of probity, governance, transparency of decision-making, procurement practice, scrutiny and best value.
This very thorough and detailed report delivers a scathing assessment of the way those principles have been treated. Its 28 recommendations highlight: the need for reviews of financial regulations; better oversight and scrutiny; the make-up of the board; reporting to the board; that the public interest test should be foremost in terms of transparency; and that not enough attention is paid to conflicts of interest, including those of the mayor. Very seriously, the report highlights procurement issues, including the decision in August 2021 to change the balance of ownership in favour of the private owners to a 90:10 split, and the issue of the balance of risk between the public and private sector, when, to date, the public sector seems to have taken the bulk of the risk and been responsible for the costs invested, while the private sector has had the benefit of the profits. I am sure this way of operating would have gone down as a wow factor on “Dragons’ Den”, but has it really all been in the best interest of the people of Teesside? Have they got value for money for their public investment?
The concerns outlined in the report are absolutely not minor or trivial matters. The Minister made much of the fact that the report concludes it did not find evidence of illegality or corruption. Well, good, but  surely we have learned from recent high-profile scandals, such as the Post Office Horizon issue, infected blood, and the supply of PPE, that there may be ways of operating that, while not strictly speaking illegal, are certainly not desirable or acceptable.
This scandal has exposed gaps in accountability and proper attention to local democratic scrutiny and a failure to follow the principles of spending public money, which makes it clear that there should be a further investigation by the National Audit Office. The NAO has already indicated that it would be willing and able to carry out that review. The people of the north-east surely deserve reassurance that every pound of their money invested in this project will count and will deliver sufficient return—especially as the private sector developers seem to have reaped a pretty healthy return, with little or no investment. So I ask the Minister: will a proper accounting review by the NAO will now be undertaken?
I understand that the chair of the Public Accounts Committee called the metro mayors together when they were elected and suggested they put robust auditing arrangements in place—as, following the abolition of the Audit Commission, there was no regulated accounting for them. The accounts published recently for Teesside were the first for the public to see. Is the Minister reassured that the advice of the PAC chair was taken?
This review represents a scathing indictment of what has happened on Teesside, and if we are to grow the country’s economy at pace and scale, as is my party’s ambition, surely it is important to understand the detail of the lessons that need to be learned. What steps did the Government take to ensure that officials who have previously worked at South Tees Development Corporation or public bodies on Teesside were free to comply with the investigation, regardless of any non-disclosure agreements they may have signed? The report itself cites that a former monitoring officer who advised on some of the significant decisions—including the move to 90:10 ownership—
“was invited to interview but declined because they felt their professional duties barred them from participating in the review”.
Can the Minister answer the question that so many local people are asking about the sale of scrap metal and aggregate from the site? Is she reassured that an appropriate share of the benefit from those sales has gone to local people?
To conclude, while we all accept that there is a need for major regeneration projects to proceed with pace, is the Minister satisfied with a report which found that:
“We did not see sufficient information provided to Board to allow them to provide effective challenge and undertake the level of due diligence expected of a commercial Board”?
There has been no private finance invested to date, while over £560 million of public funds have been spent or committed. Outcomes are reported quarterly to government, in line with the agreed criteria. However, these do not record the cumulative position on either costs or benefits, nor do they compare the current overall position in respect of costs or benefits with those set out in the business case.
Inappropriate decisions and a lack of transparency, which failed to guard against allegations of wrongdoing, are occurring and the principles of spending public  money are not being consistently observed. Does the Minister conclude that the people of Teesside got value for money for their very considerable investment? Does she conclude, as the Minister in the other place did, that there should be no referrals onwards to other bodies for further review? Surely this damning report asks more questions than it answers—questions that the people of the north-east deserve and have a right to have answered.
I will finish with the final words of the report, which ask the questions so many local people, including the Northern Echo, want answered. The report says that:
“Based on the evidence from the review the governance and financial management arrangements are not of themselves sufficiently robust or transparent to evidence value for money”.
What are the Government going to do about this?

Baroness Pinnock: My Lords, I thank the Minister for the Statement. What a sad state of affairs it is that a vital and very large regeneration project in the north-east of England has to be the subject of an independent government review because of justified public criticism and concern.
The Financial Times and the Yorkshire Post have both, independently, been investigating the decisions made by the mayor and the development corporation. Senior investigative journalists with considerable experience have been seeking answers to basic questions of openness and probity in relation to the mayor, the development corporation, the joint venture and the local councils. They were absolutely right to do so. What is more, this report confirms their claims.
Unfortunately, this Statement seeks to draw a veil over the very serious conclusions drawn by the independent panel. The starting point is that the Tees Valley project is funded by hundreds of millions of pounds of public money, either from government grant or local prudential borrowing. The investment of public money rightly brings with it higher levels of transparency, challenge and probity.
There are 28 recommendations in the report, and they reveal a damning indictment of the process and procedures adopted by the mayor and the STDC with the joint venture company. The report states that the panel is not confident that
“we have been given access to all relevant materials”,
and that
“we have not been able to pursue all lines of evidence or examine all transactions”.
Anyone reading that will know that the panel is greatly concerned that there is much more to be investigated. My first question to the Minister is whether the panel will be given more time to examine those areas that have yet to be covered, or, as the noble Baroness, Lady Taylor, suggested, whether the NAO will be asked to investigate.
In its own words, the panel focused on just six areas, the main one being the establishment of the joint venture. Initially, this was a 50:50 deal between the public and private sectors, and that is a common arrangement for such schemes. However, the arrangement morphed into a 90:10 split, with the private sector taking the 90%. The report states that
“there is no formal partnership agreement that sets out the obligations of the JV partners, although it is clear that the JV Partners are heavily influential within the operations of the Teesworks site”.
My second question is whether the Minister concurs that there is no such formal agreement. If so, will the Government demand that there is one, and that that agreement will be open to public scrutiny?
One of the curious decisions made by the Teesside mayor and the combined authority is the appointment of two individuals as partners in the joint venture. In my experience, this is highly unusual in publicly funded projects. My third question is therefore whether a joint venture with individuals is in the best interests of transparency.
I turn to my fourth question. Following the report’s statement that the panel were “surprised” that, when the joint venture was set up in 2020, the report doing so
“contains so little detailed explanation and implies that there aren’t any material implications directly arising from this change in approach”,
even though the result of the joint venture was that
“two or three privately owned companies would likely receive significant financial returns”.
This was indeed the outcome. Can the Minister tell the House whether the balance of reward and liability detailed in the report is a fair one, and one which gives best value to public money?
There are myriad questions that require an answer from the Government. My next question concerns the liabilities apparently unknowingly acquired by the local councils and the Tees Valley Combined Authority. The first two recommendations of the report focus on the issue of who makes the gains and who holds the losses. My fifth question is this: does the Minister agree that passing on liabilities to local authorities while local government is in such a parlous financial state is, at the least, poor management, and, at worst, a deliberate ploy to shoulder local authorities with liabilities that are not rightly theirs?
I turn to my sixth and final question. Will the Minister agree to return to the House with a progress report on the implementation of all 28 recommendations, as I note the mayor has accepted these recommendations only “in principle”? Those of us who care deeply about good governance, probity in the use of public money and transparent decision-making want to see these recommendations implemented in full.

Baroness Penn: My Lords, I thank both noble Baronesses for their questions. Before I turn to the specific points, it is worth reminding the House of the context of both the review and the work being done in Tees Valley by the development corporation.
Remediating and regenerating the former Redcar steelworks is a highly complex brownfield regeneration opportunity. The alternative is a massive liability to taxpayers in clean-up costs and an annual multimillion pound bill just to maintain a highly contaminated site. Most importantly, as my noble friend Lord Heseltine  said in his 2016 report on the Tees Valley, the site is also part of a much bigger picture, which provides an opportunity for regeneration that is unrivalled in size and scale and also in potential opportunity, as we are seeing with development of the freeport in the area.
In June last year, at the request of the Tees Valley mayor, my noble friend Lord Houchen, an extraordinary independent review was launched by my right honourable friend the Secretary of State for Levelling Up, Housing and Communities. That review was commissioned in response to and to consider the serious allegations of corruption and illegality made by a Labour Member of Parliament in the House of Commons. The findings of the review are clear on this point: those allegations are not true. The panel found no evidence of corruption or illegality. In addition, the panel also made a series of recommendations aiming to strengthen governance and increase transparency. We welcome this oversight, as does the mayor, who has confirmed that he intends in principle to accept all the recommendations relevant to him and his authority. There were two recommendations relevant to central government. We will carefully consider how to support the continued success of mayoral development corporations and the recommendation regarding the landfill tax.
The noble Baroness, Lady Pinnock, asked a series of specific questions about the report’s recommendations. It is right that the panel has considered a number of specific issues in the development of its conclusions and recommendations. The next steps are that the Secretary of State has written to the Tees Valley mayor, asking him to respond to the panel’s recommendations within six weeks, and it would not be right at this time for me to comment any further on specific examples quoted. It is important that the combined authority shows progress, and we will wait to see its proposals before deciding on further action. However, I am confident that the mayor will take these recommendations seriously and I look forward to receiving that update. It is only right that we give the mayor, working with partners, time to reflect on the panel’s report. We will review his reflections and response to the Secretary of State before setting out any further action that may be needed.
The noble Baroness, Lady Taylor, asked whether the NAO would now be asked to come in and do a further report in this area. The Secretary of State considered at the time of the review the suggestion that the NAO should undertake this review. However, it is not its role to audit or examine individual local authorities, and its powers would not normally be used for that purpose. Instead, the Secretary of State appointed a panel of three independent local government experts. It would therefore be duplicative and wasteful to commission a second review. The NAO said it would use our review to understand the implications for its other work programmes.
While the origination of the review is unique in that it was a request from the mayor, the form of the review is similar to others commissioned by the department, including in Croydon, Nottingham, Slough and Woking. We are taking a similar approach to other cases in relation to the next steps following the review by asking the mayor to respond to the Secretary of State about how he intends to respond to the review’s recommendations.
The noble Baroness also asked whether people were free to give evidence to the review, and in particular about the use of non-disclosure agreements. The panel chair has confirmed that she is not aware of any party who could not speak to the review or provide information due to a non-disclosure agreement. She is right that in the review it is stated that one former monitoring officer was invited to interview but declined because they felt their professional duties barred them from participating in the review, but that was not the subject of an NDA. Indeed, Tees Valley combined authority confirmed to the panel that it had informed the individual that it had no objection to them participating in the review.
It is also important in that context and in the context of the question from the noble Baroness, Lady Pinnock, about whether the panel had sufficient information to draw conclusions from the review and sufficient time to conduct it, to give the full quote:
“We have however secured sufficient consistent evidence to support our conclusions. We have found no evidence of corruption or illegality. We have identified a need to strengthen governance and increase transparency which can be done with limited impact on pace of delivery”.
The noble Baroness was right that the panel could not follow every lead; none the less, it stated that it had confidence in its findings based on the evidence that it had.
In terms of the timing of the review, I understand that it was totally independent of government; the panel was given sufficient time to conduct the review in the way that it wanted and gather the evidence it felt it needed to draw its conclusions. There was no constraint on the panel in that respect.
Finally, I turn to the questions of private involvement in the redevelopment of the Tees Valley, which is essential, as well as value for money and the public benefit that will come from the regeneration project. It is important to acknowledge that, after SSI’s collapse, the Government took on the responsibility for the site via the receivership process. They spent around £18 million annually just to keep the site secure and manage the worst hazards, including explosion and pollution risks for local populations. The site has required investment to clean up and an important principle of devolution is that decisions are taken locally to benefit local people.
While regeneration is still in its early stages and it is too early to make such an assessment on value for money, the report has identified that a number of benefits have already been achieved, including: 17% of the land already under contract, with a further 40% at heads of terms; 940 construction jobs, plus a further 1,950 recently announced; 2,295 direct and 3,890 indirect jobs created once the sites are operational; 450 acres of land remediated or in remediation; £1.3 billion of business rate income potential over the next 40 years, with a further £1.4 billion at heads of terms; and a new £450 million quay.
So both noble Baronesses are right to say that at the heart of this issue are the people of Teesside and the potential value of that site. The figures I quoted show some of the benefits that we are beginning to derive from this major project. We welcome the scrutiny of the panel, and I place on record our great thanks to  the three-strong panel for their thorough work: Angie Ridgwell, the chief executive of Lancashire county council, Richard Paver, previously the first treasurer of the Greater Manchester combined authority, and Quentin Baker, the director of law and governance at Hertfordshire county council.
Tees Valley has a proud industrial history, and the Government are committed to giving it the proudest possible future, putting it front and centre of our mission to level up the country.

Lord Lennie: The Minister said it was not the National Audit Office’s role to investigate individual authorities—or something like that—but the report has revealed at least massive financial mismanagement of this project. It seems that, since the report was published, further calls to the National Audit Office to investigate this have been made. Why will the Government not accept them?

Baroness Penn: My answer is the same as before: the Secretary of State, at the time of the review, considered the suggestion that the NAO undertake the review. But it is not its role to audit or examine individual local authorities, and its powers would not normally be used for that purpose. The process that has been followed for this review has been followed for other reviews of local authorities when looking at such issues. We followed the normal process in this instance.

Lord Jackson of Peterborough: My Lords, I very much welcome the Minister’s Statement and the robust and comprehensive report of the panel. Does she agree that, particularly in the other place, elected representatives have a special responsibility to judiciously use parliamentary privilege? I think I can say that as a former Member of the other place, and now a Member of your Lordships’ House. In future we need to learn lessons from this situation. Aspersions were cast and accusations were made of illegality against a Member of your Lordships’ House. More importantly, it did real damage to inward investment and future business in the Tees Valley. That is obviously to be regretted.

Baroness Penn: I agree with my noble friend that it is a matter of regret that those allegations were made, in the terms that they were made. It is incredibly serious to allege corruption and illegality. The findings of the review are absolutely clear on this; the review found no evidence of corruption or illegality.

Baroness Chapman of Darlington: My Lords, I am afraid that allegations of illegality and corruption were not the only allegations that led to this review. There were also allegations of a lack of transparency and—as a taxpayer in Tees Valley myself; my family have lived there for generations—there is a great deal of concern about a lack of value for money for taxpayers. Those complaints have been upheld by this report. On various occasions in the run-up to this review, the Mayor of Tees Valley asserted that there could not have been any wrongdoing because an official from  the Government was involved in the decisions that were found so lacking by this review. Would the Minister like to comment on that?

Baroness Penn: As I said in my original response, the Government welcome the recommendations on strengthening governance and transparency. We welcome the oversight that this review has provided in those terms. I think the noble Baroness might be referring to the fact that the government official is a member of the board of the development authority. When a government official is a member on a board, in examples such as this, their role is as an observer. In this case, however, the panel noted examples of questions being raised by that government member as part of that review.

Lord Scriven: My Lords, I would like to directly quote from the report because the devil is always in the detail:
“The JV partners are clearly astute, commercial businessmen. They have a clear business model whereby they support distressed businesses and do not accept liabilities until they are satisfied they can hedge investment against secure income streams … At this juncture, the JV partners have put no direct cash into the project and have received nearly £45m in dividends and payments, and hold £63m of cash … in TWL accounts”.
This is on the back of £500 million-worth of public sector investment, which made those strips of land ready for the private sector operators to make these profits. Does this kind of approach show the principles of good and ethical public sector procurement that gives value to the taxpayer? If not, what will the Government do to ensure that this kind of deal does not happen again—not just in Teesside, but in any mayoral authority?

Baroness Penn: My Lords, as I have set out, there have already been clear public benefits to the redevelopment in Teesside. On the question of involving private partners in this work, the report sets out very clearly that the business case was clear: public sector funding would not be sufficient to complete remediation of the site and a private sector partner would be required. There are lessons to be learned from this report; the Government have been clear on that. That is why we have given the Mayor of Tees Valley time to consider the recommendations in the report, as the vast majority are for the mayor and combined authority. We will then look at those responses and consider the recommendations for the Government alongside that and take forward a process for improving accountability and transparency in this instance.

Baroness McIntosh of Pickering: My Lords, I congratulate the Government on the investment they have made and for the review panel they held. I will ask a slightly different question. Those of us in North Yorkshire feel a little like the poor relations, because a lot of investment has gone into Tees Valley. We are about to have elections for a North Yorkshire and York mayor. If my reading of the orders setting up the mayor are correct, we will not be in receipt of any government funds; we will have to raise our own money to pay for infrastructure, transport and other services. Is my  understanding correct, and does it not seem a little unfair that we could not have even a small proportion of the money that has gone into Tees Valley?

Baroness Penn: My Lords, the decision to set up the North Yorkshire and York Mayoral Combined Authority was taken in combination with the elected representatives and local councils in that area, which all agreed to it. Part of those discussions was around funding, and it is right that we take forward what was agreed as part of that package. Of course, a vast range of different funds are available to combined authorities and local authorities to benefit from, including our levelling-up funding, and those opportunities will continue in future.

Baroness Bryan of Partick: Does the Minister accept that the Oral Statement is all but a total whitewash? None of the issues raised in questions to the Minister was covered in it. Can she specifically explain what the issues were that resulted in the Secretary of State requesting the panel to make recommendations on strengthening governance and increasing transparency? From that, we must assume that very real concerns were held by the Secretary of State that were not covered in the Oral Statement.

Baroness Penn: My Lords, my understanding of the genesis of the report is that it was requested by the Tees Valley Mayor himself to allow a response to the very serious allegations made by a Member of Parliament in the House of Commons about corruption and illegality. Those allegations have been found to be untrue.

Lord Beith: My Lords, I know that the Minister takes seriously the importance of this project for Teesside, but I do not recognise anything that she said about those parts of the report that are excoriating in their description of how public and private money has been handled. It states that
“most decisions are vested in a small number of individuals. This together with the limited reporting means that there is not a robustness within the system. Inappropriate decisions and a lack of transparency which fail to guard against allegations of wrongdoing are occurring, and the principles of spending public money are not being consistently observed”.
That is pretty serious, and I am sure that she must recognise that.

Baroness Penn: My Lords, I absolutely recognise the issues raised by the independent panel. It has clearly considered a number of specific issues, and the Secretary of State has written to the Tees Valley Mayor asking him to respond to the panel’s recommendations within six weeks. It is not right for me at this time to comment further on specific examples, but it is important that the combined authority shows progress. We will wait to see its own proposals before deciding on any further action. It is worth making sure that the report is taken in its full context and that we look at the full picture. Another quote from the report that may be useful is:
“There are many voices which articulate a positive view of the project, highlighting the work that has been done and the clear evidence of the achievements which have been made in regenerating  an historic part of the UK’s industrial heritage, the final demise of which, in 2015/16 had devastating results for a community that had been badly affected by the changing global patterns of industrial production. A significant amount of regeneration of the area has occurred and new businesses are moving in bringing jobs and other collateral benefits for the local area”.

Lord Udny-Lister: My Lords, does the Minister agree that the report also clearly shows that the site was costing the Government £20 million? I went to the site in my former role as chairman of the Homes and Communities Agency many years ago. The report shows that there are now 9,000 jobs on the site and nearly £1.5 billion-worth of business rates being created, yet there is an awful lot being said here in criticism of something that is actually showing real levelling up taking place.

Baroness Penn: My noble friend is absolutely right that the cost of not going ahead would not have been not nothing but an annual cost to the taxpayer with no benefit whatever—it was just keeping the site safe. I have just quoted the report’s recognition of the regeneration that has started at that site. Benefits to the area have begun to accrue in terms of jobs, potential business rates and wealth generation that we would not have seen if action had not been taken to reinvigorate the largest site, in Europe at least, in terms of the need for regeneration.

Baroness Ford: Does the Minister agree that the hollowing out of local government audits since the abolition of the Audit Commission has led to serious deficiencies in financial control in the audit of complex joint ventures such as this? It is simply not acceptable that we leave a situation where we have no capacity to understand the obligations and accountabilities of joint venture partners. What are the Government proposing to do about that as a result of this review?

Baroness Penn: The Government do not agree with that position. The Audit Commission was bureaucratic; it tied up local government with tick-box exercises rather than having real value. That is why it was abolished. It is right that we have the proper processes in place to ensure proper accountability, transparency and value for money. We believe that can be done through local processes. We will obviously look at the recommendations in the report, including those for central government, and take those into account as we continue to take our work forward.

Lord Mackenzie of Framwellgate: My Lords, would it be reasonable for this House to expect the mayor, who, as the Minister said, is a Member of this House, to perhaps attend this debate and answer some of the questions?

Baroness Penn: My Lords, this Statement repeat is by the Government to respond on their position on this report. As I have set out, the Secretary of State has written to the mayor and asked for his response to its recommendations within six weeks. We will then consider any further steps that need to be taken and make sure that the House is updated appropriately.

Baroness Bennett of Manor Castle: My Lords, as the noble Baroness, Lady Pinnock, said, there are many areas of concern that are yet to be covered by any investigation. Indeed, the report notes that many issues raised by third parties were outside the scope of its review, such as those raised regarding wildlife die-off and health and safety. There were, of course, many grave concerns and a tragedy of two men dying on the site. There were subsequent accidents where an excavator fell into the river with the driver inside, and dangerous exposure to benzine. There must be concern about whether the remediation of the site has been carried out properly. What further plans do the Government have to look into all those other issues raised locally, which remain concerns and which the report has not covered?

Baroness Penn: I do not believe that there are any further plans to cover any further reviews.

Baroness Chapman of Darlington: My Lords, the report says clearly that the measures in place
“do not meet the standards expected when managing public funds”.
I have read the recommendations and I look forward to the mayor’s response to them. Does the Minister think that, outside of the mayor’s response, the Government have a duty to ensure that this kind of practice does not continue and that there is training or perhaps some intervention from the Government? The Government have to take some of the responsibility here, because they have allowed a situation to evolve where the standards that we would expect for managing public funds have not been met. For all we know, because of the lack of transparency, this situation could be replicated in other areas.

Baroness Penn: I say to the noble Baroness that we have considered the panel’s findings against the draft best value guidance, which was published in July 2023, and concluded that they do not meet the test for urgent intervention. The panel makes a number of recommendations for the combined authority, the development corporation and other partners, and some for government. We are now giving the mayor and partners time to reflect on the panel’s report. We have asked him to write to us and set out his action plan for responding to the recommendations within six weeks. One of the recommendations for government was around the clarity of legislation in this area and oversight arrangements. We will take that away and look at it carefully, because that is an area, for example, that could have read- across to other development corporations or combined authorities.

Lord Scriven: The Minister has mentioned a number of benefits—and no one disputes that regeneration benefits are required—but does she accept that those benefits have come totally on the back of public sector investment and that, as the report says, no private sector investment has gone towards them, yet still the liabilities for the land, if not used, lie with the public sector? That is the correct position, is it not?

Baroness Penn: The reality is that a project of this size will require significant public sector investment, which has taken place, but the review is also clear that remediation of this size and scale would not be able to  take place without private partners also participating. We are making sure that we look at the lessons that we can learn from this review, but it is also important to consider both the option of doing nothing, which would have come at a multibillion-pound cost to the public purse, and the benefits that people in the local area are already reaping from the investment that has come in to date.

Lord Lennie: My Lords, the noble Baroness, Lady Ford, asked about the lack of the audit function in local authorities. The Minister said that the Government had put “processes in place” to replace the Audit Commission. Can she explain what those processes are, and whether they will now be involved in investigating financial management in this Tees Valley development corporation?

Baroness Penn: My Lords, the Audit Commission regulated, micro-managed and inspected local councils, forcing them to spend time ticking boxes and filling in forms rather than getting on with the business of local government. It hindered transparency and scrutiny. Local government can put in its own systems of local authority financial reporting and audit to ensure that it is accountable for spending public money effectively.
With regard to transparency functions, there is Oflog—the new data-driven organisation that will provide transparent and authoritative sources of information for the performance of local government. This will, however, be vastly different to how the Audit Commission operated, which imposed compliance requirements on local authorities and conducted routine inspections.

Baroness Taylor of Stevenage: I have not heard anyone advocating for the Audit Commission; what we have been saying is that, since the Audit Commission went, the private sector auditors who have been appointed have struggled to deal with the complexities of joint venture auditing. That is the issue. With that in mind, will the Minister reflect on the quite exceptional circumstances of this case and whether it might justify a more detailed audit review by the National Audit Office? Has she had a response to the request from the noble Baroness, Lady Pinnock, that we hear back once the mayor has had a chance to consider his response to the 28 recommendations in the review?

Baroness Penn: I am afraid that I will have to disappoint the noble Baroness on her first question. We will not be referring this matter to the NAO. However, as I said in my initial response, the NAO has said that it will reflect on the findings of the review for its own programme of work. Of course, when the Government receive their response from the mayor and partners, we will reflect on what that means for next steps and will make sure that the House is kept up to date on what they are.

Situation in Israel and the Occupied Palestinian Territories
 - Statement

The following Statement was made in the House of Commons on Monday 29 January.
“With permission, I will update the House on the situation in Israel and Gaza.
Last week, my noble friend the Foreign Secretary visited the region as part of sustained British efforts to end the fighting and build towards a lasting solution. This statement will also cover the International Court of Justice’s decision on provisional measures, and the appalling allegations against the United Nations Relief and Works Agency for Palestine Refugees. As we debate these events, I know the whole House shares my horror at the heart-wrenching impact of this conflict.
One hundred and fourteen days on from Hamas’s barbaric attacks, they still hold more than 130 hostages. Innocent Palestinians are suffering, with over 25,000 people having died, and hunger and disease spreading. The Government’s end goal is clear: Israelis should be able to live without fear of Hamas terrorism, and Gazans should be able to rebuild their lives.
My right honourable friend the Prime Minister has led our engagement in the region and with partners to achieve that goal. Last week, he spoke to President Biden and met families of hostages, while my noble friend Lord Ahmad joined a Security Council debate in New York. The Foreign Secretary visited Israel, the Occupied Palestinian Territories, Qatar and Turkey, meeting leaders, Ministers, and other hostage families. The Foreign Secretary called for an immediate pause to get more aid in and to get hostages out, and for that pause to turn into a sustainable, permanent ceasefire, without a return to fighting.
The British Government have identified five vital steps for that to happen: a political horizon that provides a credible and irreversible pathway towards a two-state solution; forming a new Palestinian Government for the West Bank and Gaza, accompanied by an international support package; removing Hamas’s capacity to launch attacks against Israel; the release of all Israeli hostages; and key Hamas leaders agreeing to leave Gaza. All those things are intricately linked, and we cannot secure one without all the others. There are also many other elements to consider, such as Arab-Israeli normalisation, security guarantees, and financing the rebuilding of Gaza, but we need to generate momentum now towards a permanent peace. That is why pushing for a pause now is so important, and why we need a Contact Group meeting, bringing together the key players as soon as possible.
I will now turn to the desperate humanitarian situation. The Government are focused on practical solutions to get aid into Gaza. We have trebled our aid to the Occupied Palestinian Territories since 7 October, committing £60 million this financial year. In Israel, the Foreign Secretary pressed for changes to allow unhindered humanitarian access, such as opening more crossing points for longer and permitting deliveries via Ashdod port. He announced work with Qatar to get more aid into Gaza, with our joint consignment containing 17 tonnes of family-sized tents being flown last Thursday. Earlier this month, Royal Fleet Auxiliary ‘Lyme Bay’ delivered 87 tonnes of aid into Port Said. Crucially, we are supporting the United Nations World Food Programme to deliver a new humanitarian land corridor from Jordan into Gaza, which has already delivered over 1,000 tonnes of aid into Gaza. We know the  desperate plight of civilians caught up in this and the suffering they are going through, and we will continue to do all we can with our partners to save lives.
I turn to the ICJ ruling and allegations against UNRWA. Right honourable and honourable Members will know that we had considerable concerns about South Africa’s decision to bring this case. Israel has the right to defend itself against Hamas, and we do not believe that Israel’s actions in Gaza can be described as a genocide. Of course, we respect the role and independence of the ICJ, and the court has now reached a decision on provisional measures. It called for increased aid into Gaza, and measures to ensure basic services, as we have been calling for. It has ordered Israel to preserve evidence relating to allegations of genocide, reporting to the court on progress within one month. It has also ordered the immediate release of all hostages, and reminded all parties to the conflict that they are bound by international humanitarian law. Those are points that we have been pressing consistently, and we will continue to press them after the court’s decision. For our part, Britain continues to engage closely with the Israeli Government on the conduct of their military campaign in Gaza. We have said that they must take greater care to avoid harming civilians and civilian infrastructure.
Finally, I turn to the very serious allegations about UNRWA first publicised last week, with further media reporting over the weekend. The agency is critical to delivering humanitarian assistance into Gaza and across the region. It plays a stabilising role at a time when we need focus on de-escalating tensions. The UK is a long-standing donor to UNRWA, as are our closest partners, notably the United States. Since 7 October, we have allocated a further £16 million to it as part of our response to the crisis. UNRWA’s 13,000 staff in Gaza continue their working at great personal risk in the most dangerous circumstances: 152 UNRWA staff members have lost their lives.
The UK is however appalled by allegations that any agency staff were involved in the 7 October atrocities. We welcome the swift action that UNRWA has taken to terminate contracts while it launches an immediate investigation. We and several partners are temporarily pausing future funding until we have reviewed these investigations. We continue to fund vital aid delivery through multiple other partners, including other UN agencies and international and British non-governmental organisations.
This week, the Government’s engagement continues. The Foreign Secretary and Lord Ahmad will again travel to the region. I am travelling to Qatar next week. We will continue to drive progress towards a lasting solution. As the Government have said, it is only when the prize of peace is more attractive than the potential benefit of continued conflict that there will be the chance of a better future. The time to start is now”.

Lord Collins of Highbury: My Lords, the horrors of recent months in Israel and Gaza have been intolerable. Millions are displaced, desperate and hungry, and Israel continues to use devastating tactics that have seen far too many innocent civilians killed. With unacceptable blocks on essential aid and nowhere safe  for civilians, there is a humanitarian catastrophe and, now, warnings of a deadly famine. Meanwhile, Hamas terrorists continue to hold hostages, hide among civilians, and fire rockets into Israel.
The need for a sustainable ceasefire is clear. The fighting must stop urgently; we need a humanitarian truce now. A humanitarian truce leading to a sustainable ceasefire is a necessary step from which we can begin a bigger push towards a political solution and a just and lasting peace. A sustainable ceasefire means that Hamas must release all remaining hostages and end attacks on Israel, and that Israel must end its bombing campaign and allow full humanitarian access to Gaza. I hope the Minister will be able to update the House on the latest negotiations to secure the hostages’ release and a humanitarian truce. There must be a new political process to turn the rhetoric around two states living side by side in peace into a reality. Israeli and Palestinian leaders must engage with this process as the only long-term hope of delivering peace and stability.
Last night, the Foreign Secretary, the noble Lord, Lord Cameron, said that the United Kingdom has “a responsibility” to set out what a Palestinian state would look like. He stressed that the Palestinian people would have to be shown “irreversible” progress towards a two-state solution, and that
“as that happens, we with allies will look at the issue of recognising a Palestinian state, including at the United Nations”.
This morning, in FCDO Questions, my right honourable friend David Lammy welcomed this, arguing that recognition should not wait for the final status agreement but should be part of efforts to achieve one. Can the Minister tell us how we will take this forward at the United Nations, and which allies will be backing the Foreign Secretary’s call?
The International Court of Justice’s interim ruling under the genocide convention on the situation in Gaza is a profoundly serious moment. International law must be upheld, the international courts must be respected, and all sides must be accountable for their actions. The ICJ’s interim ruling does not give a verdict on this case, but it sets out urgent provisional measures that must be followed. Andrew Mitchell said yesterday that he welcomed the ICJ’s call for the immediate release of hostages and the need to get more aid into Gaza, making it clear that an immediate pause is necessary to get the aid in and the hostages out. He then stressed that the United Kingdom regularly calls on Israel
“to uphold its obligations under international humanitarian law, and … will continue to do so”. —[Official Report, Commons, 29/1/24; col. 623.]
Can the Minister confirm that this included calling on Israel to comply with the orders in this ruling in full? Have we made that call?
The allegations that a number of UNRWA employees were involved in the appalling 7 October terror attacks are truly shocking. Anyone involved should be held to account in full by law. It is right that contracts have been terminated and UNRWA has launched an investigation. However, Gaza is in a humanitarian emergency, and aid getting in must surge, not stop. UNRWA plays a vital role in providing life-saving assistance.
Yesterday, Andrew Mitchell said that he had spoken to Sigrid Kaag, the humanitarian and reconstruction co-ordinator for Gaza, and that
“she made it clear … that while we have zero tolerance of these dreadful things that are alleged to have been done, we cannot operate at zero risks”.
In confirming that the United Kingdom will suspend any future funding until we have the reports of the investigation, Andrew Mitchell recognised that UNRWA assets are absolutely
“essential to delivering in Gaza”.—[Official Report, Commons, 29/1/24; col. 628.]
Will the Minister this afternoon outline a clear and fast pathway for future funding to return, so that aid can get in? We cannot let innocent Palestinians lose life- saving aid because of the actions of the Hamas terrorists.

Lord Purvis of Tweed: My Lords, the noble Lord, Lord Benyon, is a respected Minister in this House and I mean no disrespect to him. However, we are asking questions on a Statement about the Foreign Secretary’s activities, in the House that he is a Member of, but repeated by another Minister, it having been made in the House of Commons. The Foreign Secretary made a very significant contribution to this debate, outside this House, to the Conservative Middle East Council, on which we are also going to be asking questions of this Minister. I think it would be appropriate for the Foreign Secretary to be in this House, of which he is a Member, to take questions on speeches that he makes—especially those which could make a significant change to policy, and which the noble Lord, Lord Collins, asked valid questions on. We can now only go on a speech made at a Conservative Party event and an article in the Daily Mail in trying to elicit whether the Government’s policy on the recognition of the state of Palestine has changed.
If it has changed, these Benches will welcome it. We have a long-standing view on the recognition of the state of Palestine. My honourable friend Layla Moran has twice now launched her presentation Bill in the House of Commons, and in it she outlined what practical steps would be necessary if we were moving towards recognition. That was first presented before the violence in October and the Hamas atrocities, but it is even more important now. I look forward to the Minister outlining very clearly what the Government’s new approach is regarding what practical steps they will be taking to bring this about. This House has debated recognition of the state of Palestine. Is it the Government’s intention that, in government time, we will be debating this again? That would be a natural corollary of what the Foreign Secretary’s speech last night indicated.
With regard to the ICJ, it was regrettable from our perspective that the Government rather undermined the processes, but it is welcome that they have accepted what the rulings are: the recognition of the atrocities committed by Hamas and the responsibilities now upon Israel. Previously, I have asked the noble Lord, Lord Ahmad, what data and information the UK Government are collecting from our monitoring, both in the skies and through other monitoring, with regard to activities. Will we be participating in the work of  the ICJ now, given its ruling, to ensure that proper information is collated about the tactics of the Israel Defense Forces within Gaza? We know, even just today, from BBC Verify, of the estimate that between 51% and 61% of all buildings in Gaza have now been destroyed or damaged; that is between 144,000 and 175,000 buildings. It is estimated that 26,000 Palestinians have been killed, 70% of them being women and children. The need for adherence to the ruling is incredibly important.
On the UNRWA situation and the very serious allegations, I agree with the noble Lord that the investigation needs to be expedited and clear, and that those responsible need to be prosecuted. I welcome the Minister’s Statement that 13,000 staff are providing life-saving services for the people within Gaza. As we know, UNRWA is operating outside Gaza too. Can the Minister clarify what the UK “pause” means in reality? Have we stopped co-ordinating on the delivery of aid with UNRWA, given that, in many areas, it continues to be the only provider of assistance? Is our pause open-ended, or will it be contingent on whether the report has been made or any prosecutions carried forward?
Finally, there is now likely to be US retaliation for the attacks and the deaths of their service personnel. There is likely to be political change in the Israeli Government, depending on coalition partners’ response to the latest talks in Paris. This is a time of great volatility and concern. What role is the UK playing overall? Is it a leading role, if we are changing our position on the state of Palestine, to ensure a collective approach to not just a full bilateral ceasefire, but a regional partnership for peace, in what may be a very dangerous time ahead?

Lord Benyon: I am grateful to both the noble Lords. I agree wholeheartedly with the analysis of the current situation given by the noble Lord, Lord Collins. The whole House shares his and my horror at the impact of this war. It is 115 days since Hamas’s attacks against the State of Israel. Hamas continues to hold more than 130 hostages, and innocent Palestinians are suffering, with over 25,000 people killed. Israelis must be able to live in security and Gazans must be able to rebuild their lives.
The noble Lord, Lord Collins, asked about the latest negotiations. The United Kingdom is involved, at the highest levels, in setting up a contact group with key partners. We are in the key position of having friends across the region and being a friend to the State of Israel. We are working closely with everyone. The Prime Minister has spoken to the President of the United States at length and to a great many other people. The Foreign Secretary is not here today because he is travelling to the Kingdom of Saudi Arabia, Oman and Lebanon, as part of a continued list of engagements in the region which he has been undertaking since he took his post. I am sure that the House thinks that is right, because he clearly has to take that role. I will come on to talk about concerns about recent comments.
We have called for an immediate pause to get more aid in and hostages out. We want this pause to turn into a sustainable, permanent ceasefire, without a return to fighting. We have identified five steps for this to happen, which answers one of the crucial questions that both noble Lords asked. A political horizon will provide a credible and irreversible pathway towards a two-state solution. We can then form a new Palestinian Government for the West Bank in Gaza, accompanied by an international support package. Key to that is removing Hamas’s capacity to launch attacks against Israel, the release of all Israeli hostages and Hamas leaders agreeing to leave Gaza.
The noble Lords asked about the ICJ ruling. The United Kingdom is a firm supporter of the rules-based order and has been for decades. We respect the ICJ ruling in its entirety. One cannot pick and mix on this. There is a question about whether it came at a time when such sensitivities were manifest in the region, but we absolutely accept this ruling.
My right honourable friend Andrew Mitchell spoke to Philippe Lazzarini, the head of UNRWA, the day before yesterday. The inquiry that he announced goes much further than a normal UN inquiry; it is independent and we must let it take its course. I share everyone’s view that it is wrong to have people who are alleged to have been perpetrators of the 7 October attacks in this organisation. It is right to cease their employment and to investigate further.
I give the House this clear commitment. First, our contributions to UNRWA have been made for this financial year and our commitment to trebling aid to Gaza still stands. The UK is providing £60 million in humanitarian assistance to support other partners, including the British Red Cross, UNICEF, the UN World Food Programme and the Egyptian Red Crescent Society, in order to respond to the critical food, fuel, water, health, shelter and security needs in Gaza.
We will continue our support for the United Nations World Food Programme to deliver a new humanitarian land corridor from Jordan into Gaza. Some 750 tonnes of life-saving food aid arrived in the first delivery in December. The second delivery of 315 tonnes was made earlier this year. We will continue to support the Red Crescent Society, with which we have a long-standing, trusted relationship, to make sure that this happens. But for this to happen, we need to see border crossings open on a more sustained basis. We are calling for the Ashdod port to be opened as a route for aid to reach Gaza, and to extend the opening hours and the capacity of the Nitzana screening facility and the Kerem Shalom checkpoint so that more trucks, aid and fuel can enter Gaza. This requires the Kerem Shalom crossing to be open seven days a week. My noble friend Lord Cameron has raised this at the highest levels in Israel.
I cannot give the noble Lord, Lord Purvis, a complete answer today to his question about data collection. There is a variety of different sources—some open, and some requiring other forms of data. We are monitoring what is going on, and we are concerned about the scale of the tragic loss of life. We want to make sure that we are encouraging Israel to defend its borders, as it has the absolute right to do, but to do so proportionately.
The US retaliation against the attack on its base in Jordan is obviously an indication of the complexity of the problems right across the region. We are in close touch with the United States about this. We are deeply mindful of the 2,500 British personnel in the region, and we want to make sure that they are safe and that their families are assured that they are safe. Any response must, first of all, give a clear indication to Iran and its proxies that they cannot operate in this way. We are also mindful that we need to move this whole region towards a more peaceful and stable future.

Lord Hannay of Chiswick: My Lords, does the Minister accept that there was a very warm reaction to the reports of what the Foreign Secretary said to the Conservative Middle East Council dinner? Does this not show that the old approach to a two-state solution—whereby Palestine is recognised as a state and Israel is fully recognised by the Arabs at the end of the process—is not going to work? This is a very difficult issue. What is probably needed is a process which, from the start, makes it clear that Arab participants should recognise Israel and that all of us, including Israel, should recognise Palestine as a state. This is the only viable outcome.
Do the Government share the view of the US Secretary of State, who said that UNRWA’s ability to provide and distribute various forms of aid in Gaza was “absolutely indispensable”? This is surely covered by the ruling of the International Court of Justice that all must do their best to increase the flow of aid into Gaza—including UNRWA, even though what some of its employees have been accused of is quite horrible and must be punished following an inquiry.

Lord Benyon: The noble Lord understands more than any of us how sensitive this time and the surrounding negotiations are. It is absolutely clear that Gaza and the West Bank are occupied Palestinian territory and will be part of a future Palestinian state. We support a two-state solution that guarantees security and stability for both the Israeli and the Palestinian people. Recently, I read a most interesting quote from former Mossad director, Meir Dagan. Commenting on the two-state solution, he said:
“We have no other way. Not because the Palestinians are my top priority but because I am concerned about Israel’s well-being and I want to do what I can to ensure Israel’s existence.”
That shows a real depth of understanding of the importance of working towards that conclusion.
On the noble Lord’s point about UNRWA, we are not alone in having paused our financial support for UNRWA. The United States, Germany, Australia, Italy, Canada, Finland, Switzerland and the Netherlands have all temporarily paused funding. I gave a list of other organisations that we are using. The noble Lord is absolutely right that UNRWA has the facilities on the ground and many thousands of people working in and around Gaza who have the ability to get food, fuel and all other humanitarian items to the people of Gaza. We want to be back working with it when this inquiry has worked out who precisely was involved in the attacks to get back international confidence in it as an organisation to deliver aid.

Lord Wolfson of Tredegar: My Lords, we have been having discussions about the process which will lead to peace, but we need to start the process. In order to start the process, do we not need to recognise two things? First, the world of 8 October is a fundamentally different world from the world of 6 October. Secondly, Israel is a democracy, unlike Hamas in Gaza or the Palestinian Authority in the West Bank. That means that if we are going to be realistic about encouraging Israel to start that process, we need to recognise that, even today, well over 100 of its citizens are still being held hostage. I know the Minister has personally made significant efforts to meet hostage families and to work on that issue. If we are going to start a process to peace in the Middle East, which I would welcome as I have worked on it for as long as I can, we need to face basic political realities. Unless and until those hostages are released, the process will not begin. If we want to see peace in the Middle East after that conflict, the first step must be to get the hostages released. Does my noble friend agree?

Lord Benyon: I certainly do. That is the first step in a road out of this sorry saga that we all want to see achieved. I cannot imagine—well, I can imagine what it is like for the families, because on two occasions I have met them, and I am due to meet some more this week. Noble Lords can understand the emotion. When you meet them, it is absolutely a searing realisation of the true brutality of those events and the continuous misery for those families, including the parents of a child who is around one year old. You can only imagine what they feel about that.
On my noble friend’s point about democracy, he is absolutely right. As we can see daily in our newspapers, Israel is a vibrant democracy. There are future changes perhaps—we do not know—but we will support whoever is the legitimate Government of Israel to help to find a solution to this. My noble friend is also right that it has been 18 years, I think, since free and fair elections, or elections, have taken place in Gaza. The Hamas controlling body has no democratic authority. We want to make sure that the future of Gaza does not have Hamas anywhere in it.

Baroness Blackstone: My Lords, while welcoming much of what the Minister has said, will he tell the House what steps the Government are taking to ensure that the Israeli Government actually respond to the request that the UK Government and the Foreign Secretary are now making about an immediate cessation of hostilities to allow for more aid to get in, for hostages to get out and above all for the slaughter to stop with a view to turning this into a permanent sustainable ceasefire, which is demanded by more and more countries and by public opinion in this country? Has the time not come for the UK to cease trading in arms with Israel while it continues to kill thousands of civilians, as we have heard, 70% of whom are women and children, which my noble friend Lord Collins has described from the Front Bench as a humanitarian disaster?

Lord Benyon: We are very concerned with the immediate days—hours, even—of this emerging saga. Whatever any Minister says at any Dispatch Box is  very often out of date by the time he or she sits down. First of all, we absolutely accept that Israel has the right to defend itself against the vile terrorism that it suffered on 7 October. We have very strict rules in this country and fantastic oversight, in this place and beyond, of our arms trading arrangements. Any Government should apply those oversights to it, and we do. But it is absolutely vital that we concentrate on the immediate problem, which is getting those hostages released. I pay tribute to the Government of Qatar for their support and great expertise in achieving this. Those who have been involved in the Northern Ireland issue over the years know how galling it is when you see people that you know have done terrible things being swapped for victims of terrorism who have done no wrong. But it does require an enormous amount of courage and determination to make sure that we can get these hostages out and move forward to sustainable, lasting peace.

Baroness Janke: My Lords, I thank the Minister for his remarks. I also pay tribute to workers in Gaza, particularly, and in the West Bank, many of whom are risking their own lives to provide support and medical help for the victims of the bombardments. Does the Minister appreciate that UNRWA apparently does not have enough money to see it through February, to provide aid in Gaza and in the West Bank? Will he look into, or have the Government looked into, the fact that medical facilities for victims are being denied and systematically destroyed, according to the reports coming to us from Medical Aid for Palestinians? What are the Government going to do to ensure that all the victims have access to the medical support and the help that international law says they should?

Lord Benyon: It is crucial to get the right amount of medical aid and food, and all the other types of sustenance the people of Gaza require. That means more trucks, more ships and more material getting across borders. That is our priority, and there are a great many organisations that can assist with the delivery of that; I listed them earlier. But the noble Baroness is right; UNRWA employs 13,000 people in Gaza and has provided essential basic healthcare, education, protection and vital humanitarian assistance for hundreds of thousands of people in Gaza. Some 1.7 million Palestinians in Gaza are eligible for UNRWA support. In Gaza, it operates 183 schools and two primary healthcare facilities. We want to make sure that we can use this agency as quickly as possible, but that is not stopping the level of compassionate support that the British people are giving to the people of Gaza. We are getting that aid in as quickly as we can, but we need those border crossings to be more functional.

Lord Pickles: My Lords, I draw attention to my entry in the register, particularly those relating to friendship with Israel. Does my noble friend remember that, when the International Court of Justice announced its inquiry, Hamas pledged to honour those interim judgments? The court has asked for the release of hostages. Is my noble friend disappointed that that has not happened—that Hamas has broken its word? If we are to recognise an independent Palestinian state  before there is a lasting peace and mutual recognition of boundaries, what assurances does my noble friend intend to put in to ensure the safety of Israel? Or would the British Government be content, for example, with a sovereign Palestinian state entering into a defence arrangement with Iran?

Lord Benyon: I understand my noble friend’s concerns and hope that, through the process we can now move towards, we can address the 30-year failure of the international community to support a lasting solution. In Israel we have seen rising incomes and a state that is very advanced in its security, trade and the living standards of its population, but one thing that has not been delivered to the people of Israel, and which really matters to them and to Palestinians in the Occupied Territories, is security. That is what we want to achieve. We want a lasting security, and then Israel can continue to be a real force, both economically and culturally, around the world.

Baroness Uddin: My Lords, no democratic country should have the mandate to mercilessly kill another nation. What advice have our Government received since the ICJ interim ruling as to whether they will also be dragged into complicity should the international court determine that there have been war crimes and breaches of the genocide convention?

Lord Benyon: The British Government have never defined what genocide is; we leave that for a court to do. However, we do not believe that this qualifies as genocide. We accept, and are pleased by, the ruling of the court in its calls for the release of the hostages and for the necessity of getting aid into Gaza.

Lord Dobbs: My Lords, the Minister referred to the failure of the international community for 30 years or more in this matter. That implies that, if a two-state solution is to be brought about, as the Foreign Secretary said last night—and I very much welcome his remarks, and indeed the very balanced remarks of the Opposition, if I may say so, this afternoon—that surely implies that simply asking them to bring about a solution is not going to be enough. It requires more than just persuasion, and possibly a degree of international coercion on both sides, to bring about a solution in the wider interest. That is difficult when the Israeli Government, as at the moment, do not believe in and have rejected a two-state solution. Does the Minister have any ideas how the real problem of Hamas might be dealt with in this ongoing discussion?

Lord Benyon: None of these solutions is entirely in our gift. We do not have the ability to wave a wand or send a gunboat or do all the things that Foreign Ministers might have done in centuries past. It comes down to really hard work and old-fashioned diplomacy. That is what my noble friend the Foreign Secretary, the Prime Minister, other Ministers, my noble friend Lord Ahmad—who has been ceaselessly working on this—and the Diplomatic Service have been trying to draw together. We think we have a thread which can lead towards a solution. We have to be positive about this. If you just think of the world as it exists—my noble friend referred to 8 October, the  day after the attack—it is so bleak and depressing that you can hardly see a way forward. But there is a solution and we know it can work. It comes down to working with our partners, and, most of all, working with the Government of Israel and with sensible people in the Occupied Territories, to make sure that we can have a solution which is free of Hamas and gives lasting security to the Palestinian people and Israeli citizens.

Lord Anderson of Swansea: My Lords, do the Government assume that alternative sources of finance for humanitarian aid, which the Minister mentioned, will make up for the loss of financial aid currently going to UNRWA? Clearly, the Government are radically revising their policy at the moment and have set out these five important conditions. So far as the two-state solution is concerned, are the Government going to wait for the slowest? Will they wait for a consensus among their allies? What will they deem to be necessary before they accept a two-state solution? On the other matter, is the Minister confident that the Palestinian Authority is ready to assume responsibility for the West Bank and Gaza?

Lord Benyon: My noble friend the Foreign Secretary met the President of the Occupied West Bank Territories, Mahmoud Abbas, and will continue to talk to him to find, I hope, precisely that solution. On the noble Lord’s first point, on UNRWA, as I said, we have given to UNRWA what we were going to give this financial year, and the additional sums that we are promising will still get, in aid, to the people of Gaza through a variety of sources that I listed earlier.

Lord Leigh of Hurley: My Lords, can my noble friend the Minister clarify his last remarks? When he said that my noble friend Lord Cameron has had discussions with the Prime Minister of Palestine, can we be crystal-clear that the United Kingdom will not recognise a state of Palestine that is led by the current Palestinian Authority and the Fatah organisation, which has been so involved in terror, and will not recognise a Gaza-led Government where Hamas has either control or power?

Lord Benyon: I am grateful to my noble friend, and allow me to clarify. We will recognise a Palestinian state as part of a two-state solution at the time that is right and with the leadership in place. We have already talked about needing a technocratic Government who will resolve the issues that exist within Gaza in particular, and we want to make sure that that Government do not have Hamas anywhere near them, or as part of them, and that they are trusted in those territories but also by the people of Israel, who want to live in peace with their neighbours.

Lord Grocott: My Lords, for as long as most of us can remember, Ministers at the Dispatch Box, of both parties, have reiterated the commitment to a two-state solution, although I have to say—and a Select Committee of this House made this position explicit not so long ago—that the possibility of that being achieved as long as the Government in Israel pursue  their expansion of settlements on the West Bank is diminishing. It is only at times of awful violence, such as we have seen in the last few months, that the attention of the international community is focused on what the two-state solution actually means and whether we will work for it as soon as the violence ceases. What is new is not just that Israel has been moving towards making a two-state solution more difficult but that the Prime Minister of Israel, Benjamin Netanyahu, has made it quite clear that he simply will not accept a Palestinian state. I should like to know what steps the Government are taking to try to impress on him that there can be no long-term chance of peace in the Middle East until the Palestinians, like the Israelis, have a state of their own.

Lord Benyon: The noble Lord raises the fundamental issue here. There are different voices in Israel, and we will work with whoever is in government to achieve what we, with our partners in the region and with countries such as the United States, think is the best way forward for the people of Israel and those living in the Occupied Territories. The noble Lord is right: that is very difficult to achieve, particularly when people at the top of the Government are saying that our policy is not right for them. However, there are plenty of people who believe—I earlier quoted somebody deeply involved with the security of the State of Israel—that it is fundamentally important not just for the Palestinians but for the future of Israel. It is that which we want to secure. Israel is our friend; we can speak frankly with friends, and that is what we do in diplomatic terms. We do not cut ourselves off from it just because there might be some side to an argument that we disagree with. We will work with Israel to try to achieve what we think is best for the long-term security of the region, which affects us all.

Pedicabs (London) Bill [HL]
 - Report

Clause 2: Licences, fares and other matters

Amendment 1

Lord Davies of Gower: Moved by Lord Davies of Gower
1: Clause 2, page 2, line 19, at end insert “(including, in particular, provision about making noise)”Member's explanatory statementThis amendment spells out that provision in pedicab regulations about the conduct of drivers can include provision about making noise. Regulations might, for example, prohibit a driver from making certain kinds of noise or noise over a certain volume at some or all times or in some or all places.

Lord Davies of Gower: My Lords, I am grateful for your Lordships’ continued interest in this small but important Bill. The Government have listened carefully to the concerns raised by noble Lords, and I reiterate what I have said in private sessions: that your Lordships’ engagement has helped the Government reflect on the Bill’s provisions.
The first group today consists of a single amendment. It will amend Clause 2(6)(i), which relates to the conduct of pedicab drivers. It will specify that pedicab regulations can include provisions about making noise. During Grand Committee, I was clear that the Bill as drafted provided sufficient scope for pedicab regulations to address the issue of noise, under Clause 2(6). Furthermore, Transport for London has provided assurance that the playing of loud music and causing disturbance would be covered in its regulations.
However, it was clear that your Lordships felt particularly strongly about this issue. This is understandable. The Government are aware of the stories of loud music being played from pedicabs during the day and long into the night, and understand the disruption this causes to residents, businesses and those going about their daily lives. The Government have therefore tabled the amendment in recognition of the importance of this issue and to support the emergence of an effective regulatory regime.
Consistent with the approach taken in the Bill, the precise manner in which noise nuisance is addressed will be for Transport for London to determine in bringing forward regulations, and, again, this will be subject to consultation as per Clause 1(3). I hope that noble Lords welcome this amendment and that it satisfactorily addresses any outstanding concerns. I beg to move.

Baroness Stowell of Beeston: My Lords, I welcome the amendment tabled by my noble friend. I am hugely grateful to him for having listened carefully during our debates in Committee. I congratulate him on the influence he has been able to have in the department in securing the Secretary of State’s agreement to this change.
I note that my noble friend said that in the Government’s view, the Bill’s original wording was sufficient to tackle the concern about noise; none the less, it is reassuring to have noise provisions in the Bill. I should be particularly pleased if my noble friend emphasised when he winds up that the explanatory statement alongside the amendment on the Marshalled List points out that the regulations that can be made to deal with noise, and which would be subject to consultation by Transport for London, might
“prohibit a driver from making certain kinds of noise or noise over a certain volume at some or all times or in some or all places.”
As my noble friend knows, one of my concerns, and one of the reasons why I was keen to get provisions on noise in the Bill, is that there has been a tendency to talk about noise only after a certain time of day. The existing law that allows any clampdown on noise pollution very much kicks in after a certain time and, as we know, the noise made by these vehicles and their drivers can be particularly disturbing and disruptive at any time of day. That is worth us reinforcing, so that TfL knows the expectation of this House.
As this is probably the last time I will speak during the passage of the Bill, I thank my noble friend again and congratulate him on his successful stewardship of this important Bill, which people have waited a long time for in London. I congratulate him on what he has been able to achieve over the past couple of months.

Lord Borwick: My Lords, I repeat my declarations of interest from previous occasions. I entirely agree with my noble friend Baroness Stowell—she is right. I worry about the House of Lords legislating for the difference between “noise” and “music”. We might be in a minority in the country overall in our distinction between the two, but this is a magnificent example of a Bill that has been changed by good points made by Back-Benchers in this House. The clause proposed by my noble friend Lord Davies is an entirely sensible move.

Viscount Goschen: My Lords, I too congratulate my noble friend on his stewardship and handling of the Bill. It is, perhaps, not the biggest, most important transport Bill to come before your Lordships but is none the less highly targeted, and we commend it. In particular, I thank my noble friend for listening to the concerns about noise that have been raised almost universally around the House. I have witnessed this when walking back from your Lordships’ House to where I often stay during the week, and I have heard this extraordinary noise coming from these vehicles.
There is a problem, and the Bill is an enabling Bill. It allows TfL to produce the regulations and regulate the operators of these vehicles. Noise is one of the most important issues the House has heard about, and I am delighted the Government have recognised it and produced their own amendment.

Baroness Randerson: My Lords, there is a risk that this is beginning to sound like Third Reading, but I put on record from these Benches my thanks to the Minister and his team for their time and the care with which they have considered the points we made on Report and in meetings between then and today. They have been generous with their time and prepared to give serious consideration to the points made.
This amendment is, as noble Lords have said, about noise. Where, when, how and how loud the noise is, is a key aspect of the concerns about pedicabs. This is therefore a very useful addition and clarification and is in direct response to points made in Grand Committee. I am delighted that this amendment has come forward.

Lord Liddle: My Lords, on behalf of the Opposition, I will be very brief. We support this amendment and congratulate the Minister on bringing it forward; it demonstrates that Members of the House have been listened to. There is clearly a problem of noise created by pedicabs, and it affects people of all social classes who live in Soho, Mayfair and parts of Westminster. We are glad to see this amendment being proposed.

Lord Davies of Gower: My Lords, I am grateful for the acceptance of this amendment. We recognise the point made by my noble friend Lady Stowell about noise being disallowed after 9 pm. Clearly, during the winter months and dark nights it is not good to have this sort of behaviour and high levels of noise on the streets. That was very much behind the thinking in bringing this amendment forward. I am very grateful to all other noble Lords who have spoken, and I will certainly pass the thanks on to the team.
Amendment 1 agreed.

Amendment 2

Baroness Randerson: Moved by Baroness Randerson
2: Clause 2, page 2, line 19, at end insert—“(6A) For the purpose ensuring greater safety of electric powered pedicabs (of a type specified in subsection (6B)) and secondary lithium-ion batteries used to power them, regulations must be made within 12 months of the passing of this Act specifying that such vehicles and the lithium-ion batteries used to power them must—(a) have had conformity assessment procedures carried out on them by a conformity assessment body authorised by the Secretary of State to carry out such assessments; and(b) have the technical documentation and declaration of conformity drawn up by the manufacturer.(6B) The type of pedicab to which section (6A) refers—(a) must be pedalled in order to receive electric-powered back-up; and(b) has an electric motor with a maximum power output of backup power of no more than 250 watts; and(c) can travel at no more than 15.5 mph as the electric motor will not propel the bike when travelling more than 15.5mph.”Member's explanatory statementThis amendment would require the Government to make regulations to introduce independent conformity assessment processes for electric powered pedicabs and the batteries used to power them.

Baroness Randerson: I regret to tell the House that this group will take slightly longer than the previous one. This amendment in my name is about the safety of pedicabs and the lithium-ion batteries that assist with the pedalling to propel them in certain cases. It covers only pedicabs where the battery back-up is available only when the pedicab is being pedalled, where such back-up can be given only up to 15.5 miles per hour and where the maximum power is up to 250 watts. Currently, there are no requirements for independent safety tests on such vehicles and their batteries.
In Committee, my noble friend Lord Foster put forward amendments about these issues, which I also spoke to. He is unfortunately unable to be here today, so I am attempting to carry forward his work. From the outset on the Bill, safety and testing, in general, have been at the centre of the Government’s thinking. Clause 2(6)(c) refers to “safety requirements” and Clause 2(6)(f) to “the testing of pedicabs”. In his opening speech, the Minister referred to safety on four occasions.
My amendment builds on an issue that has been taken up by noble Lords across the Chamber. I have also raised it previously in different contexts, as has my noble friend Lord Foster. I raised it on 11 July last year with the Minister’s predecessor and my noble friend raised it on 23 November last year in a QSD. Unfortunately, on both occasions, government responses lacked the clarity that we need on the crucial differences in testing requirements between the L-category vehicles up to 1,000 watts and the sub-250-watt electric bicycles. The latter are pedal cycles with an auxiliary electric motor and a maximum continuous rated power of up to 250 watts. The other key difference is that the more powerful vehicles, over 250 watts, have to be registered and have a number plate, which vehicles up to 250 watts do not require.
In Grand Committee, Amendments 21 and 22 dealt with charging systems and with lithium-ion batteries powering electrically assisted pedicabs. The Minister, in his response, said:
“I note that the requirement for power-assisted pedicabs to meet suitable product regulation is covered by existing law and therefore this amendment is not necessary”.—[Official Report, 11/12/23; col. GC 243.]
He then went on to point out that manufacturers are responsible for ensuring that their products meet safety standards. That is self-certification, which is exactly the point of the amendment and why we need higher standards with third-party safety assessments coming in. Those safety assessments should be undertaken by conformity assessment bodies, also called test houses. To assist noble Lords with a parallel, that is how fire- works, for example, are tested and assured for safety.
In his response to our last debate, the Minister also said that batteries must comply with the Batteries and Accumulators (Placing on the Market) Regulations 2008. However, unfortunately, those regulations limit only the amount of cadmium and mercury in the battery and have nothing to do with fire safety testing. I press these issues because already, 13 people have died as a result of lithium-ion battery fires, one person on New Year’s Day this year. Many more people have been very badly injured and there has been a massive cost from the destruction of property.
These amendments are supported by organisations such as the National Fire Chiefs Council, the Association of British Insurers, the Royal Society for the Prevention of Accidents and the charity Electrical Safety First. They are also supported by dozens of other similar organisations—30 in total.
In June, the noble Lord, Lord Offord, assured my noble friend Lord Foster that the Government were taking action on these issues, but nothing has happened since. A recent survey showed that a third of e-bikes and batteries are bought online, where is it known that standards are likely to be lower and the whole situation is known to be riskier. As the Bill is intrinsically concerned with a set of activities—pedicab riding—known to be without any regulation, where the Government rightly say that risks have been taken and these are dangerous activities, this is exactly the kind of situation where some of kind of control over the lithium-ion batteries involved in the vehicles would be very useful, worth while and likely to save lives or reduce the risk to people’s health.
Nearly half the people who charge their bike batteries do so in a communal area. That is known to be the most dangerous place to do it. If a fire breaks out, it blocks your exit and it is far too hot in these circumstances for you to be able to go through that area. More than half of people with electric bikes charge them while they are asleep, so a fire is more likely to take hold. All these risks could be dealt with by safety measures built into the regulations flowing from the Bill and public awareness could be raised. The Government have emphasised the dangers posed by pedicabs and battery fires are clearly part of that. I am certainly not going to push this to a vote today, but I ask the Minister—who is clearly keen to listen to concerns—to think about this very seriously. I urge him either to accept this amendment or to bring something back of a similar nature.

Lord Moylan: My Lords, I have considerable sympathy with the argument made by the noble Baroness, Lady Randerson. I find it very strange that, in this modern world, it seems impossible to rely on the safety of something as straightforward as a battery. We have known about battery-like things for at least 250 years. I think it was in the 18th century that the first battery was discovered.
Now we have lithium-ion batteries, which appear to be perfectly safe in one’s telephone but not if they are attached to a pedicab. We have a similar problem with e-scooters. On some occasions, the batteries have been known to blow up, which is why they are banned from every part of the London Underground network—platforms and stations as well as trains; they are a fire risk. How has this circumstance come about? I have no answer.
While I have sympathy with the noble Baroness’s argument, I am glad to hear that she is not intending to advance this to a vote. I am not entirely sure that this is the right Bill for the issue to be addressed in. There is a wider question about what the Government are doing to ensure the safety of batteries that are available for consumers to buy as part of equipment. In this case, they are allowed to buy e-scooters, but not to ride them on the public highway. That is another anomaly that perhaps we will address at some stage, when the endless trial the Government have been conducting on e-scooters is eventually brought to a conclusion and some determination is made about their future. There needs to be a measure that addressees the safety of batteries more broadly than simply in pedicabs, as this amendment would.
We will come in the next group to the question of guidance. I will simply say that if my noble friend were to say that safety issues including the safety of batteries would be included in guidance and covered by regulations, I think that would be satisfactory, without the need for the noble Baroness’s amendment. It is an issue that needs to be addressed.

Lord Borwick: My Lords, I entirely agree with my noble friend; it all makes sense. I shall give a little history: at one stage I was chairman of a lithium battery manufacturer. It is possible in the manufacturing of a lithium battery for a little strip of lithium to move from one part of the battery to another during the manufacturing process. That can later cause a fire.
The trouble with this amendment is entirely that, as my noble friend mentioned, if we got it right in pedicabs, we would be getting it right in only a tiny percentage of the total number of vehicles with large lithium batteries. It is a particularly serious problem when fires break out in big batteries in small houses. These pedicabs are not going to be recharged in people’s houses in the majority of cases; it will be done at a depot of some sort.
This is a good provision in the wrong place. I would look forward to supporting such a clause in a different place, if only there was something equivalent. The noble Baroness has grabbed the opportunity and should be applauded for doing that.

Viscount Goschen: My Lords, I agree with my noble friend that the first part of the noble Baroness’s amendment is very interesting but has a much wider application. None the less, she has cleverly found an opportunity to air broader concerns about lithium batteries. However, I feel rather sorry for the second part of her amendment, which is a very substantive measure. I do not think she particularly referred to it in her remarks and it has not been covered in the debate so far. It is about the amount of power that can be deployed by these vehicles and that they must be pedal-assisted and not just pure electric power.
The reason I support the noble Baroness’s sentiment behind that is something that we have covered in earlier debates. With electrically powered vehicles, which I think are great and have the ability to solve all sorts of environmental and other problems, particularly in cities, there is a blurring of where an electric bicycle ends and an electric motorcycle begins, and where an electric-powered but pedal-assisted vehicle ends and a motor vehicle begins, and whether the words that the noble Baroness has suggested really belong in TfL’s guidance or in the Bill. My concern is about putting very specific things in the Bill in terms of future-proofing. Who knows what will come along in future developments? Perhaps it is better covered by guidance.
However, there is a much wider concern about the difficulty of keeping up, from a regulatory perspective, with very rapid consumer change and the availability of electric scooters, which we talked about a lot at earlier stages of the Bill. Perhaps when the noble Baroness comes to wind up her remarks, she might just dwell a little on the second part of her amendment.

Lord Liddle: My Lords, we on this side of the House have enormous sympathy for the amendment that the noble Baroness, Lady Randerson, has proposed, and I find myself, at least on this occasion, in full agreement with the remarks of the noble Lords, Lord Moylan and Lord Borwick, and the noble Viscount, Lord Goschen. However, it is the Government’s decision that one of the few transport measures they were prepared to put in their programme for this Session was a pedicabs Bill which, of course, is of very limited reach and scope. In fact, you could say that its reach is two wards of a single London borough. That is a pity, given that the country has enormous transport challenges in front of it, such as a failing railway system and the need for bus regulation. I could go on.
However, one of the issues that clearly has to be addressed is the one highlighted in this amendment. Although it would be inappropriate to try to carry amendments on this question of electric batteries, I hoped that the Minister might be able—indeed, I have urged him privately to do this—to come up with a timetable for when the Government might address these wider and more important questions. I am looking forward to his speech because it seems to me that in the House we have had a lot of concern raised about electric batteries and about the experimental period, as it were, of regulation of e-scooters, and we do not know how long that is going to go on for or what the outcome is eventually going to be. I would have thought that the Government must have a plan—after all, they are, I assume, thinking they might be re-elected—so  we would quite like to know what future plans the Government have on what are very important and serious matters in which lives are at stake.

Lord Davies of Gower: My Lords, I thank your Lordships for their diligence in scrutinising this Bill’s provisions. This second group of amendments is focused on electric pedicabs. My department is aware of concerns held by noble Lords surrounding batteries in e-cycles and e-scooters. Amendment 2 in the name of the noble Baroness, Lady Randerson, seeks to place a requirement on the Government to introduce independent conformity assessment processes for electrically powered pedicabs and the batteries used to power these vehicles. If I may say so, she Baroness puts her case well, and I will now seek to answer some of her points.
Noble Lords may recall my response to an amendment tabled in Committee on conformity assessments and potentially placing requirements on power-assisted pedicabs. My response to the amendment debated today will echo my previous position. The Bill is about closing the legal anomaly so that London pedicabs can be licensed for the first time. The amendment raises a much wider question about the construction of electrically assisted pedal cycles.
The UKCA, the UK conformity assessment marking, and its EU equivalent, the CE, the conformité Européene, demonstrate a manufacturer’s claim of conformity with statutory requirements. All e-cycles and e-scooters need to comply with UK product safety regulations. This includes the Supply of Machinery (Safety) Regulations 2008, which set out the detailed health and safety requirements for the design and construction of a product. Additionally, there is an existing requirement in these machinery regulations that responsible persons for all machinery within scope, which would include power-assisted pedicabs, must draw up a detailed technical file and a declaration of conformity. There are existing requirements to carry out appropriate conformity assessment procedures. In instances where the responsible person does not comply with existing requirements, they are in breach of the regulations.
The Government are seeking to reform the UK’s product safety framework through the product safety review. The Office for Product Safety and Standards is currently reviewing responses to its consultation on how it regulates all products on the GB market, including machinery, and where multiple regulations apply to specific products. The Government’s intention is to publish a response later this year that summarises findings and sets out its future plans.
Product regulations would not cover a scenario whereby a pedicab driver or operator adapted their power-assisted pedicab following purchase, However, Clause 2(6) provides Transport for London with the ability to make provisions relating to matters such as safety requirements, testing, speed restrictions, and the quality and roadworthiness of pedicabs. Therefore, there is sufficient scope for Transport for London to determine the expected standards for pedicabs operating on London’s roads.
Although pedicab batteries when not supplied as part of a pedicab would not be subject to a regime that requires the UK conformity assessment marking to be  affixed to them, their safety would be covered by the General Product Safety Regulations. These regulations require that all consumer products placed on the market are safe. Furthermore, batteries must comply with the Batteries and Accumulators (Placing on the Market) Regulations 2008, which restrict the substances used in batteries and accumulators, as well as setting out requirements for their environmentally friendly end of life.
In bringing my comments to a conclusion, I draw your Lordships’ attention to the work of the Office for Product Safety and Standards, and Defra. They are in the process of reviewing the position on batteries. This includes examining the new EU battery directive and looking into the safety of the lithium-ion batteries used in e-cycles and e-scooters. This work should conclude in 2024. Alongside this, my department is developing guidance on the safe use of batteries in e-cycles and e-scooters, and we will publish this soon. I respectfully suggest that the Bill, with its narrow focus on licensing London pedicabs, is not the place to start tackling this issue. It is best dealt with as part of the wider work being taken forward by the Office for Product Safety and Standards and by Defra.

Baroness Randerson: I thank the Minister for his response, although it was rather disappointing. The noble Lord, Lord Moylan, makes the point that this is not the right place for these regulations, but he accepts that there is a clear danger. I simply approach it from the point of view that this might be a good place to start dealing with this danger. However, I accept that pedicabs make up a tiny percentage of the problem, as the noble Lord, Lord Borwick, says.
I say to the noble Viscount, Lord Goschen, that the key point that I was trying to tackle was that the second half of the amendment simply explains that the safety measures in the first half of the amendment apply specifically to pedal-powered bikes up to 250 watts. In our debate in Grand Committee, the issue became rather opaque, shall we say? My hope was that, within the 12 months specified in the amendment, perhaps the Government might actually tackle the whole issue so that, in tackling the pedicabs issue, they would also be tackling all the bikes concerned.
I am pleased to hear that the Minister thinks that Transport for London could do something to address this issue, and time will tell whether these are adequate powers for it. I am not arguing that it should be given the additional powers in relation to this, because I think this is a job for central government. However, we will see whether it has the sorts of powers needed to raise levels of safety. We will, I am sure, be looking to see what the office of public safety recommends, because this is not an issue that I have dreamed up. It is based on clear evidence of danger and risk and repeated fires, which come when something has gone wrong, when corners have been cut in the manufacturing process. There is clear evidence, and I very much hope that the Government pursue this with some additional urgency following this debate. Having said that, I beg leave to withdraw my amendment.
Amendment 2 withdrawn.

  
Clause 6: Procedure for pedicab regulations

Amendment 3

Lord Davies of Gower: Moved by Lord Davies of Gower
3: Clause 6, page 4, line 24, leave out subsection (2)Member's explanatory statementThis amendment means that pedicab regulations will no longer be subject to any form of parliamentary procedure.

Lord Davies of Gower: My Lords, this final group of amendments covers the process for regulations made under the Bill. Amendment 3 places responsibility for making pedicab regulations solely with Transport for London, meaning that pedicab regulations will no longer be subject to any form of parliamentary procedure.
Noble Lords will be aware that this marks a shift in the Government’s approach. The Government have listened to, and reflected on, the points raised at Second Reading and in Grand Committee, and reached the conclusion that these powers should rest with Transport for London. The Government have reached this view for several important reasons. First, it is consistent with the position for taxi and private hire vehicle licensing in the capital, where Transport for London has demonstrable experience of operating effective licensing regimes. Secondly, the Bill’s provisions extend to Greater London only, addressing the legal anomaly that has meant that London’s pedicab industry has been unregulated. The Bill presents a solution to a London-centric issue. Thirdly and finally, the relative size of the pedicab industry in London is an important factor. Estimates suggest that pedicab numbers range from 200 up to 900 in peak season. This is a significantly smaller industry than London’s taxi and PHV industries, where there are over 100,000 licensed vehicles and over 120,000 licensed drivers. Therefore, this amendment offers a proportionate approach.
While I am confident that this amendment is supported by the majority of your Lordships, I am aware that there may be some noble Lords concerned that Transport for London would seize this opportunity to remove all pedicabs from London’s streets, or to impose draconian restrictions that all but ban these vehicles. I reiterate that I do not—

Lord Tunnicliffe: I apologise for jumping in on this point but it is very important. The Minister said that the generation of regulations would be solely the responsibility of Transport for London, which is exactly where we seek to be. In preparing for this debate I looked through the Bill, and all the Minister’s amendment does—I say “all” but it may be enough, in which case I will be delighted—is to take a subsection out of Clause 6. Can I be assured that that subsection’s deletion effectively removes any DfT input to the creation of regulations other than the amendment that goes with it to introduce guidance?

Lord Davies of Gower: Yes, that is my understanding of the amendment and is correct.
Although I am confident that this amendment is supported by the majority of your Lordships, as I said, I am aware that some noble Lords may be concerned  that Transport for London would seize this opportunity to remove all pedicabs from London’s streets or to impose draconian restrictions. However, I reiterate that I do not understand this to be TfL’s intention and, furthermore, it is highly unlikely that pedicab regulations could be used to do this.
However, this moves me to Amendment 4, which gives the Secretary of State the option of issuing statutory guidance to Transport for London relating to how functions under pedicab regulations are exercised. The amendment specifies that statutory guidance may cover how functions are exercised so as to protect children and vulnerable adults from harm. This amendment intends to strike a balance with the removal of parliamentary procedure for secondary legislation made under the Bill. The Government remain aware this will be a newly regulated industry, and this amendment will give the Secretary of State the option of influencing the shape of the London pedicab regime.
Transport for London or any person authorised by it to carry out functions under pedicab regulations on its behalf will need to have regard to guidance issued by the Secretary of State. This provides a level of oversight which I hope provides assurance to any noble Lords with concerns. Further to this, Clause 1(3) requires TfL to conduct a consultation prior to making pedicab regulations.
I hope this demonstrates that the Government have listened, and that these amendments are viewed by your Lordships as a thoughtful way forward, one which will best enable Transport for London to commence work on bringing forward its regulatory regime. I beg to move.

Lord Storey: My Lords, this is almost full circle for me. About six years ago I received several complaints about pedicabs, and I tabled Written Questions for the then Minister, to be told straight off, “It is nothing to do with the Government—it is a matter for Transport for London”. Therefore, it is quite good that, coming full circle, many of these issues will be taken—with guidance—by Transport for London. That is the right and proper place for some of these issues; it makes sense to me.
I am particularly pleased that notice has been taken of safeguarding issues, particularly for children, and I am sure guidance will include that, and for anybody who is in a vulnerable situation as well, whether it be children or young women. That is absolutely right and proper.
I slightly worry that the issue of identification has not taken place. For example, if a pedicab driver does something that is not correct or behaves in an outrageous way—as we have often seen happen—as I understand it, there is no way to identify who is the owner or the driver of that pedicab and therefore to take action. I hope that this issue might be raised, maybe in guidance to Transport for London.

Baroness Randerson: My Lords, I will speak to Amendment 5 but in doing so, I welcome the Minister’s acceptance that this is very much an issue for Transport for London. My Amendment 5 is simply there to give the Minister the opportunity to provide  this House with clarity on the potential scope of the Secretary of State of State’s guidance. Because we have had this complete somersault between Committee and Report over who is going to be responsible for this, it is important to get that clarification.
There is cross-party consensus that this really is an issue for Transport for London. Like my noble friend Lord Storey, I am very pleased to see the reference to safeguarding in Amendment 4. This legislation obviously applies only to London, but it would be helpful if the Government were to publicise it beyond London because, as we made clear in our discussions at the previous stage, there are pedicab regulations in other parts of the country. It would be useful to have greater awareness of issues such as the importance of safeguarding, registration, safety and so on.
My amendment is a kind of checklist of the main issues to consider: environmental benefits; safety, which is about a lot more than just battery fires; and minimising disruption, danger and disturbance to other people, as some neighbours in London have suffered from noise and inconsiderate parking for a long time. We should not be discussing the suitability of cab ranks in detail here, but it will clearly be of great importance when decisions are made by Transport for London. My final issue is that of licensing and penalties. I assume that licensing will involve identification and registration.
It is important to make it clear that we do not want regulations which are so onerous that they destroy this industry altogether. Like other noble Lords, we want just to bring it under control so that it benefits London and is an asset, not a liability, to London tourism. For the people who hire these cabs, it should be safe and fun, not risky. I press the Minister to reassure us that the Secretary of State’s guidance will not be so onerous that it enables penalties so stiff that they put people out of business.
Proposed new subsection (6) of government Amendment 4 refers to consultation, and rightly so. Can the Minister give us an assurance that there will be Secretary of State consultation with cycling organisations and the organisation representing pedicab operators in London? Its representatives were in touch with us prior to Committee, so there is clearly such an organisation, and it is the kind of organisation that, in other industries, brings a sense of coherence that raises standards, as taxi organisations do. It is important that proper consultation is done.

Lord Borwick: I am grateful to my noble friend for bringing forward this suggestion, which, as he said, was proposed by many parties. But I am still confused, in that the Member’s explanatory statement, which is very sensible, does not quite tie up with Amendment 3 itself. Amendment 3 says “leave out subsection (2)”, but why is subsection (1) still in place? That says that
“The power to make pedicab regulations is exercisable by statutory instrument”.
If the intention is that they should not be exercisable by statutory instrument, why should we leave in that phrase? Would it not be better if the amendment left out both subsection (2) and subsection (1)? I think that would improve the Bill.

Lord Tunnicliffe: My Lords, I first thank the Minister, as others have done, for the amount of time he has taken on this Bill. Our central concern was that this is a London problem, and we created TfL to look after London’s problems. Now, I am in favour of TfL—somewhat biasedly, because I helped create it—but it has lived up to our expectations and has done a good job over the 23 years of its existence. It is very much the right organisation to do this task.
I thank the Minister for his Amendment 3, which he assures me will give TfL sole responsibility for developing regulations. I do take the point about why subsections (1), (3) and (4) are being retained, but I am sure it is all right because I have faith in the wonderful drafting powers of his team. If, upon consideration, they become a concern, I am sure that a government amendment will be tabled at Third Reading to amend any conflicts between the different parts. I hope he will give that consideration, if his team do advise him that there is a conflict.
Having said that I am in favour of Transport for London doing this task, I grudgingly accept that some of the concerns about TfL getting carried away and banning everything in sight, and making people bankrupt by charging them utterly unreasonable fees et cetera, do make a case for Amendment 4. Therefore, I recognise that that is the trade-off between the important position to take throughout the parliamentary process, while making sure there is a potential for government to create guidance that TfL has to have regard to. The balance between the two amendments, from our point of view, is acceptable.
The noble Baroness, Lady Randerson, has produced Amendment 5, which is drafted very much in the terms of many of her amendments, in the sense that it is motherhood. I am actually in favour of motherhood; it helps the world go round, and it says a series of sensible things. But the problem with putting something in legislation is whether it says all the things that should be said, or whether, conversely, it contradicts things that might be wanted. I am afraid I cannot support her. I do not think it is her intention to press the amendment, but I do commend it as a questionnaire for the Minister, to clarify the Government’s position on the points raised.

Lord Davies of Gower: My Lords, I once again thank your Lordships for their careful consideration of the Bill. I have outlined the purpose of the Government’s amendments in this group, and will now address Amendment 5, in the name of the noble Baroness, Lady Randerson.
I first reiterate the Government’s objective in bringing forward this Bill. The purpose is to provide Transport for London with the tools it needs to regulate London’s pedicabs so that journeys and vehicles are safer and fairer. This means addressing both the safety-related and traffic-related concerns, and tackling the antisocial and nuisance behaviour of certain pedicab operators and drivers.
Amendment 5, which attempts to set objectives to which the Secretary of State must have regard when issuing statutory guidance, shares the Government’s  objectives. However, this has been tabled in response to the Government’s Amendment 4, which provides the Secretary of State with the option of issuing statutory guidance to Transport for London relating to the exercise of its functions and the pedicab regulations. This provides clear parameters for the scope of any statutory guidance and therefore Amendment 5 is not necessary, as the matters it covers are addressed by provisions in the Bill. In addition, I note that prescribing in detail what the Secretary of State must consider when issuing guidance could have the effect of inadvertently excluding from the scope of the guidance matters which have not been specifically listed. For this reason, a general approach is considered preferable.
I will highlight some of the relevant provisions in the Bill. Clause 2(5) covers fares, including what fares may be charged and how passengers are notified of these. Clause 2(6) covers a wide range of issues relating to the operation of London’s pedicabs. This includes safety, the quality and roadworthiness of pedicabs, the working conditions of drivers and their conduct. Clause 2(7) gives Transport for London the power to place limitations on where and when pedicabs can operate, and Transport for London has already confirmed it will need to give proper consideration to the matter of pedicab ranks, taking into account the needs of pedicab drivers, passengers and other road users. Clause 3 sets out the enforcement mechanisms available to Transport for London and includes details of penalties.
A couple of points were raised by noble Lords. The noble Lord, Lord Storey, talked about identification of the pedicabs. That really will be a matter for Transport for London, however it intends to license them. I can think of various ways it could do it; I am sure he could as well but it will be a matter for Transport for London. On the point raised by the noble Baroness, Lady Randerson, regarding the need to consult, that is written into the Bill, most certainly, and I feel quite sure that cycling organisations will be included in that. I think that more or less covers everything apart from the point from the noble Lord, Lord Borwick. On that, we can confirm that this is solely Transport for London’s responsibility.
Amendment 3 agreed.

Amendment 4

Lord Davies of Gower: Moved by Lord Davies of Gower
4: After Clause 6, insert the following new Clause—“Guidance(1) The Secretary of State may issue guidance to Transport for London about the exercise of their functions under pedicab regulations.(2) The guidance may, in particular, include guidance about how those functions may be exercised so as to protect children, and vulnerable individuals who are 18 or over, from harm.(3) The Secretary of State may revise any guidance issued under this section.(4) The Secretary of State must arrange for any guidance issued under this section, and any revision of it, to be published.(5) Transport for London, and any person authorised by them to carry out functions under pedicab regulations  on their behalf, must have regard to any guidance issued under this section when exercising their functions under the regulations.(6) Before issuing guidance under this section the Secretary of State must consult whoever the Secretary of State considers appropriate.”Member's explanatory statementThis clause allows the Secretary of State to give guidance to TfL about the exercise of functions under pedicab regulations.  Subsection (5) requires TfL, and those authorised by TfL to exercise functions under the regulations, to have regard to the guidance when exercising functions under the regulations.
Amendment 5 (to Amendment 4) not moved.
Amendment 4 agreed.
House adjourned at 6.08 pm.